Shopping smarter with the right credit card this holiday season

With the holidays right around the corner, the retail rush will be here, and the countdown to the holidays will begin ticking down before you know it.

Nearly every year Americans spend more on holiday gifts than the previous year. In 2018, we as a country are projected to spend 5% more than last year, which translates to about $720 Billion.

In 2017, the average household took on nearly $1,100 in consumer holiday debt to pay for their purchases, kicking the payment can down the road.

For many Americans, these purchases were made on high-interest credit cards that offer low introductory rates, points or air miles to entice consumers. This often leads to revolving debt that adds up and can take years to pay off.

Instead of going into the gift-giving season with the same old plan, be strategic with the financing tools that you use. Select the right payment method for your unique needs, know your credit card rates, and get the peace of mind that you didn’t overspend this year. Using a low-interest credit card can help keep your payments manageable, and even help pay down your balances faster to reduce your debt.

The following graphic shows a few hot ticket items from 2017, and the contrast between shopping with a high-rate credit card, or a lower rate option. This table assumes that you pay off your purchases within 12 months and that any promotional offers from the higher interest rate cards have expired by December 31.

In this example, using a credit card with a higher interest rate will cost you nearly an extra $200 for the same products over the time it takes you to pay it off.

Paying off Your Credit Card Balance

Paying off your holiday balances is based on the monthly payment and the interest rate. If you were to take the $2,926.98 and compare a high-interest and low-interest card, the time it takes to pay them off will shock you.

Monthly Payment (24.00%) High Interest Rate (10.00%) Low Interest Rate Difference
$75/month 77 Months 48 Months 29 Months
$100/month 45 months 34 months 10 months
$150/month 25 months 22 months 3 months

Whichever card you choose, make sure that you pay your minimum payment plus whatever else you can squeeze out of your budget to avoid having those holiday balances around next year, just to start the cycle all over again.

KEMBA’s Low-Interest Credit Card Rates

Our low-interest credit card rates can save you money this holiday season, and year round. See why it pays to be a KEMBA member and how much you can save with our low credit card rates and excellent cash back rewards. Plus, ask us how you can transfer your high-interest credit card balances to a new KEMBA card, and pay down your debts faster. And when it comes time to plan for next year, our Christmas Club Savings can help you manage your holiday spending next year by providing you an outlet to save year-round.

*The prices listed are for demonstration purposes only and do not reflect the current market value of these items or promotional value that may fluctuate during the holiday season

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