“Christmas On a Credit Card” sounds like a snappy catchphrase! All too often though this is the reality for many families. They are financing Christmas on a credit card or credit cards. 2020 has motivated more families to spend more as Christmas and Christmas celebrations will be very different.
According to Investopedia, the average family will spend $998 to $1433 this year on gifts. This will not account for additional holiday expenses. Since 8 out of 10 people will only make the minimum payments on their credit card, this is what Christmas will cost you this year:
$1433 at 17.5% interest will take you 3 years and an extra $500 dollars in interest alone!
This also assumes a number of other factors:
- You have no current balance on your credit card.
- You will NOT add another penny to the balance.
The reality is that for most, that will not be the case. 92% of homeowners in the US according to CNBC have an average balance on their credit cards of $7200 and growing at 21% per month, excluding holiday expenses.
Christmas on a credit card is not a good idea. Anything on a credit card is not a good idea. No pun intended, but credit cards are a revolving cycle of financial insanity. No matter the strides you make, the balance never goes away! No stimulus, no tax return, will eliminate the average homeowner’s credit card debt.
So why not take advantage of the cheapest money in the market. Pay something, a monthly “bill” that will pay you back. Yes, as a homeowner, your monthly mortgage payment actually pays you back! Let’s work out a financial plan that will ensure a credit card debt-free life. Start with our calculator and see for yourself: https://refi.com/calculators/