Heading into the holiday season, here's what consumers need to know about managing credit card debt.

• The interest rate or cost for borrowing money to make a purchase through a credit card has reached a record high.
• Store or retail cards have the highest interest rates.
• Generally, buy now, pay later plans do not charge interest, but they may impose late fees.

Over the past few months, due to inflation and rising interest rates, an increasing number of consumers have been making credit card payments 30 days late or more, according to the Federal Reserve Bank of New York's latest Quarterly Report on Household Debt and Credit.

The climbing "credit card delinquencies" rate may trend higher this holiday season, as it is typically at the end of the year when more consumers start to pay late.

It is crucial to understand the meaning of "credit card delinquencies" because falling behind on card payments can negatively impact your credit score. This, in turn, can affect the interest rates you pay on mortgages, auto loans, and private loans, as well as your ability to secure insurance and certain jobs.

This holiday season, it's crucial to be knowledgeable about your payment options with credit cards, especially when shopping for gifts for loved ones.

Here are three terms that you should familiarize yourself with:

1. Annual percentage rate (APR)

Before making holiday purchases with a credit card, it is crucial to be aware of the annual percentage rate (APR) on it. The APR represents the interest rate or cost incurred yearly for borrowing money for the purchase, and card rates are currently at record highs. According to Bankrate, the average APR on a credit card is over 21%, and nearly 30% for retail store credit cards.

Matt Schulz, LendingTree's chief credit analyst, advised holiday shoppers to be aware that the APR on store credit cards could be extremely high, with some retail cards having interest rates of up to 35%, according to a LendingTree survey of 100 cards.

2. 0% APR card

You can avoid paying any interest on borrowed money by obtaining a 0% APR card, which allows you to borrow money for a specified period without any interest charges.

To avoid paying interest charges on purchases made now, look for the best 0% APR cards that offer a 21-month interest-free period. However, be aware that this period will eventually end, and the interest rate will increase to the national average or higher. As interest rates continue to rise, you could end up paying 25% or more in interest charges.

3. Buy now, pay later (BNPL)

Many retailers and app-based lenders offer buy now, pay later plans for holiday purchases, with Affirm, Apple Pay Later, and Klarna being among the most popular BNPL apps.

In the finance industry, BNPL products are also called point-of-sale installment loans.

BNPL plans allow you to make purchases and pay for them over time with an initial payment, making them a popular alternative to credit cards. However, these plans may charge a fee of up to $15 if you miss a payment.

LendingTree's Matt Schulz advised against using installment loans because it is easy to get them and can lead to overspending. He pointed out that with an installment loan, you have a limited time to pay it off, while with a credit card, you have more flexibility in your payments.