This page uses JavaScript. Your browser either does not support JavaScript or you have it turned off. To see this page properly please use a JavaScript enabled browser.
Members First CU of Florida Go to main content
Become A Member Apply for a Loan Branches ATMs
Home > "Sleighing" Your Holiday Debt
"Sleighing" Your Holiday Debt12/2/2022

wooden sleigh with Santa hat

Holiday shopping can be tons of fun — getting gifts for your loved ones, supplies, or decorations. It can also be costly, especially if you made your purchases on credit.

As of May 2022, the average credit card interest rate in the United States on accounts with balances that accessed interest was 16.65%. Credit card APRs can vary widely though, based on your credit score, debt-to-income ratio, the issuer, and other factors. And, if the balance lingers, you may find yourself still trying pay off the balance plus interest charges years down the road.

 

Example:

The annual interest rate (APR) on your credit card is 16.65%. You have a balance of $3,000 on your card with a minimum payment of 2.5%. If you make minimum payments only, it would take 20 years to pay off and you'd have to pay over $3,000 in interest charges.

Principal Balance Owed:

$3,000.00

Credit Card Annual Interest Rate (APR):

16.65%

Minimum Payment Percentage:

2.5%

Years to Pay Off Existing Balance

20 Years

Interest Paid

$3,430.29

Principal Paid

$3,000.00

 

If you should find yourself in a similar situation as the example above, you're not alone and there's hope. We're sharing three payment strategy options you should consider when paying down debt. To "sleigh" your debt quickly, it's important to remember, before you commit yourself to any payoff plan, you must first commit to not add to the balance.

1. Snowball Method 

The snowball method is a debt payment strategy that can help keep you motivated by reducing the number of debts you pay each month. With this method, you'll focus on paying off debts from the smallest balance to the largest balance. Start by paying as much as you can toward the card with the smallest balance, while still making sure to pay at least the minimum amount on all other accounts. As you pay off one card, roll the amount that you were paying to the card with the next-lowest balance.  

2. Avalanche Method

With this debt payment strategy, you'll focus on paying off the credit account with the highest interest rate first. Start by paying as much as you can toward the bill with the highest interest rate. Remember to budget enough money towards making at the least the minimum payment on all other accounts. As you pay off one card, roll the amount you were paying to the card with the next-highest rate. With the avalanche method, you'll limit the amount of interest you'll pay as you reduce your debt.

3. Debt Consolidation

A debt consolidation loan or balance transfer are also worth considering to help you pay off your debt. How do they work? The premise behind a debt consolidation loan and a balance transfer are the same — transferring high-interest balances to a lower interest loan or credit card. Once you're approved, use the funds from the debt consolidation loan or balance transfer to pay off your high-interest debt. Then, focus on making payments towards your debt consolidation loan or lower-interest credit card. For balance transfers with promotional rates, to save the most money, pay off your balance before the promotional period ends and your interest rate goes back up.

 


 

Member First Credit Union of Florida's Visa® credit card options are an excellent choice for a balance transfer. Each card comes with a fixed rate that is low and competitive. You can also bring yourself one step closer to peace of mind with a Members First debt consolidation loan. Reduce your total debt and reorganize it by rolling your debts into a single, low monthly payment so you can pay off your debt faster. Speak with a Members First representative to find the right debt repayment option for you. Call us at (850) 434-2211 and select option 2 or stop by one of our branch locations

 

Get Your Financial Check-up

Are you on track to meet your goals? If you're curious how your financial health checks out and what you could do to improve your financial well-being, take the Members First Credit Union of Florida Financial Wellness Quiz.

Start Over
How would you rate your financial health?
Good/Excellent
Needs Improvement
I'm Not Sure
Do you have an Emergency Fund?
No
Yes
Do you have debt you want to pay off?
No
Yes
Is there a large purchase you'd like to make this year or in the near future?
Yes, I'm planning to buy a car.
Yes, I'm planning to buy a house.
Yes, other.
No
Do you have a budget?
No
Yes
Do you have a budget?
No
Yes
Do you have debt you want to pay off?
No
Yes
Do you have an Emergency Fund?
Yes
No
Emergency Fund
Emergency Fund

Although there isn't a one-size-fits-all solution to financial emergencies, there are steps you can take that will minimize damage while you work on a recovery plan. Having an emergency fund is an important resource for you to have during emergencies, but what are other steps that you can take to help your financially during a crisis? We'll talk about that and how to help you decide on the best financial plan for your needs.

Learn More

Debt Repayment & Consolidation
Debt Repayment & Consolidation

Consumer debt is a common and incredibly personal part of our personal finances. The majority of U.S. adults owe money in some way, shape or form, but what this debt represents can vary from person to person. Whether you're paying down medical bills, educational expenses, home repair costs, or other high-interest purchases, there are steps you can take to help you conquer your debt.

Learn More

Auto Loans
Auto Loans

Ready to get on the road? We have the resources to make your driving dreams a reality. Get tips on purchasing a new vehicle, shop local dealer inventory with our Car Buying Service, enjoy Auto Rewards when you finance with us, and more.

Learn More

Home Loans
Home Loans

Thinking about buying your first home or another property for rental income? Members First Credit Union of Florida is here to lend a helping hand with the home-buying process from advice to financing.

Learn More

Personal Loans
Personal Loans

People need personal loans for a variety of different reasons. Whether you need funds for an emergency, medical bills, a much needed vacation, or your dream wedding, taking out a personal loan from your credit union as opposed to another type of lender is typically cheaper. We'll share why and lend a helping hand to finance your needs and/or dreams.

Learn More

IRAs, CDs, & Investments
IRAs, CDs, & Investments

Compound interest is a powerful concept in saving and investing — it pays to start saving early. We'll show you how and lend a helping hand in making your future brighter with savings and investment options like IRAs and CDs. 

Learn More

Budgeting Basics
Budgeting Basics

Budgeting doesn't mean you have to give up everything you love. Whether you're planning your first budget or re-evaluating your current budget, we'll share some ground rules that will set you up for success by changing the way you look at budgeting and help you create the guidelines for managing your money.

Learn More

Know Your Score
Know Your Score

Your credit score shouldn't be a mysterious number. Whether you've had past troubles, haven't yet established any credit, or want to get the best possible rate on a loan, knowing your score and how your credit score is calculated is important to your financial wellness. We'll share information and tips to help you create a positive credit history and boost your credit score.

Learn More

 


 

RESOURCES

 

 



« Return to "Blog" Go to main navigation
I Want To
I Want To
Loan Center
Loan Center
Credit Cards
Credit Cards
Careers
Careers
Know Your Score
Know Your Score
Members First CU of Florida
InstagramTwitterfacebookemailWordpressYouTube
NMLS #405711
Equal Housing Lender National Credit Union Administration
This Credit Union is federally-insured by the National Credit Union Administration. We do business in accordance with the Fair Housing Law and Equal Opportunity Credit Act.
Members First Credit Union of Florida is not affiliated with Members First Credit Union (Kentucky)

Members First Credit Union of FL is committed to providing a website that is accessible to the widest possible audience in accordance with ADA standards and guidelines. If you are using a screen reader or other auxiliary aid and are having problems using this website, please contact us at 877-434-6328. We are actively working to increase accessibility and usability of our website to everyone. All products and services available on this website are available at all Members First Credit Union of FL branches.

 

Any external links or websites to alternative sites are not operated by Members First Credit Union of FL. We are not responsible for the content of the alternate site or their accessibility standards.

BACK TO TOP