The holidays are full of excitement and energy! This is also the time of year that people spend the most with the hustle and bustle of the season– traveling, parties, feasting, family outings and of course buying gifts.
All of that is expensive but borrowing money for holiday costs can be easy. It can, however, also send you into shock when the bills start to come in, forcing you to face the challenge of paying them back.
The season speeds by so fast that when the new year hits, it almost feels like a day of reckoning when you see those credit card bills show up in your inbox.
Panic sets in, and you realize it’s now time to start paying back that money you spent. If the bill doesn’t scare you, then the interest rate might. If you charged all those holiday expenses on high interest credit cards, you may find yourself paying 18% or maybe even 20% in interest on your payments.
Fortunately, there are ways to minimize your financial fallout this holiday season, and it only takes a little planning!
Here are a few ideas to avoid the financial fallout of high interest borrowing for the holidays.
If you are fortunate enough to have cash you can use, don’t borrow at all!
This is probably the hardest option, and for many, it may not be feasible, but if you can avoid borrowing money to cover holiday expenses, and choose to pay cash, then you won’t have a bill waiting for you come the new year. If this sounds like the best option for you, read our blog post “Time to Start Saving For The Holidays” to better prepare next year!
If you’re not in that able to do that, you can always try using a low interest credit card.
We know we just mentioned that credit cards tend to have higher interest rates, but there are cards out there with lower rates, you just need to seek them out.
Search around for low interest credit cards and pay attention to what the rate can adjust to once the intro period is over.
For example, you can find credit cards with a low (single digit) or zero percent interest rate for the first 12 months. If you can get a new credit card right around the holiday season, you will have time to pay back that balance before that interest kicks in or increases versus if you were to have a credit card with a 18-25% interest rate.
Another idea to avoid financial fallout in the new year is take out a low-rate personal loan.
Personal loans can get you a decent spending limit but also a lower interest rate on top of that.
Lenders often offer special rates for this time of year, many of which can be in the low, single digits. It’s important to search around and see what kinds of interest rates you can find out there.
This year, Triangle Credit Union will be offering the special Holiday Cash personal loan as we’ve done in the past. You can borrow up to $10,000 to help you cover those holidays expenses for as low as a 7.49% APR*.
All three of these options will help relieve some of the fallout you could face when it comes time to pay back those holiday bills.
*Annual Percentage Rate (APR) of 7.49% is based on an interest rate of 7.49% for qualified borrowers. Personal unsecured loan APR is based on a loan amount of $10,000 for up to 60 months. Monthly payment per $1,000 is $20.16. 60 day deferred payment option available.
