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  • Smart Ways to Handle Holiday Credit Card Debt

    By | 2018-01-09T13:50:25+00:00 December 29th, 2017|Personal Finance, Personal Loans|

    It’s okay to have holiday credit card debt. You’re not alone — 38.1% of all American households have credit card debt1. But you have to handle your debt the right way, and we’re going to help you.

    Adjust Your Budget to Prioritize Debt

    Due to the high interest rate, lowering your credit card debt should be priority number one. Rework your budget in order to put more money toward your highest interest debt. You want to lower that as fast as you can.

    Don’t Add to Your Debt

    Try to avoid using your credit card until your debt is more manageable. The key is to limit yourself to only buying what you need. Don’t get tempted by sales. If you continue adding to your credit card balance, it will make eliminating your debt much more difficult.

    Eliminate Credit Card Debt With a Personal Loan

    This one is all about the interest rates. The average rate for a credit card is 16.14% APR8. The lowest available rate of a Connexus Personal Loan is 5.88% APR8. Take a look at how that impacts savings and payoff time when you compare a $5,000 Personal Loan and $5,000 of credit card debt.

    2017 Post Holiday Personal Loan
     Personal Loan8Credit Card8
    Interest Paid$783.12$3,824.90
    Months to Pay Off60182
    Interest Savings$3,041.780

    Not sure if a Personal Loan is right for you? Read this.

    Start Preparing Now to Avoid Debt Next Year

    A common strategy is to open a special savings account specifically for holiday shopping. For example, with a Connexus Holiday Club Savings Account, you set up a direct deposit amount, let your account build up throughout the year, and then get access to your money on Oct. 1 via transfer2. $50 per payday over 26 paydays will give you $1,300 to spend.

    Holiday credit card debt is stressful, but it doesn’t have to be. Make a plan, use the tools available to you, and prepare for smarter spending next year. You can do it, and remember we’re here to help.

    Also Check Out:

    Creating a Debt Management Plan That Actually Works

    3 Proven Ways to Reduce Credit Card Debt

    5 Simple Tips for Smart Holiday Spending

    Disclosures

    1 Source: https://www.valuepenguin.com/average-credit-card-debt

    2 Preauthorized automatic transfers, telephone transfers or withdrawals, electronic banking withdrawals and transfers prohibited. Funds will be automatically transferred annually to the savings account on October 1.

    3 Active checking is defined as having at least one (1) Direct Deposit of net pay, including salary, wages, government benefits, or pension made to the account each month; having ten (10) checks, ACH withdrawals, and/or debit card transactions clear the account by the last business day of each month; and electing to receive eStatements. ATM transactions not included.

    8 APR = Annual Percentage Rate. Comparison is based using the average national credit card rate of 16.14% APR as of 10/5/17 from www.creditcards.com, a $5,000 balance assuming minimum monthly payments of 3% of total balance, and no additional advances or charges. A $5,000 credit card balance at 16.14% APR with minimum monthly payments of 3% of the balance takes 182 months and $8,824.90 to pay off. Personal Loan is based on a $5,000 loan, 60 month term, 5.88% APR and monthly payments of $96.39 with $5,783.12 to pay off. The difference between $8,824.90 and $5,783.12 is $3,041.78. Enter promotion code HOLIDAY in the application process for the lowest available rate of 5.88% APR. Borrow $5,000 at 5.88% APR for 60 monthly payments of $96.39 or $19.28 per $1,000 borrowed, or 120 biweekly payments of $48.20 or $9.64 per $1,000 borrowed. Minimum loan amount $5,000, maximum loan amount $20,000. Rate includes a 1% discount for active checking3, and a 2% discount for automatic payments. Other loan rates and terms available. Standard non-promotional rates begin at 8.99% APR. Loan subject to approval and qualifications. Rate may vary on individual credit terms and relationship level. Certain restrictions may apply. Not valid on tuition expenses and interest is not tax deductible. Does not apply to loans currently financed with Connexus Credit Union. Rates subject to change. Offer valid 12/26/17 to 2/18/18.

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