Now that the holiday festivities have wrapped up, credit card bills come due.
Here are some tips on reining in debt after the holidays from Mountain America Credit Union.
How much debt do people generally accrue during the holidays?
About a third of Americans went into debt this holiday season for an average of $1,028. When you factor in interest charges—the average is over 24%—you’re looking at a sizeable debt that will linger for years. Only making the minimum payment—about $30 on a balance of $1,000—it would take about 5 years to pay off the full balance and you’d pay over $700 in interest.
How can people save money on interest?
Mountain America recommends making more than the minimum payment if you can. Just $10 extra per month could reduce the payment time by years and save the cardholder hundreds of dollars. Consumers with high credit card rates should also consider transferring their balances to a lower rate card.
For example, Mountain America’s credit card tops out at 18% APR—but it can be even lower—which is substantially better than the average credit card. This low rate would further speed up payoff and save the cardholder even more money on interest.
Are there any fees to transfer a balance?
Most large credit card companies charge 3 to 5% of the transferred amount, which can be discouraging if you have a large balance. Many credit unions have low or no fees. Mountain America never charges for balance transfers. In fact, currently we’ll pay you. Through February 29, 2024, we’re running a special promotion where you get 3% of the transferred amount as a cash bonus.
What does all this mean for the average consumer?
Taking advantage of Mountain America’s limited-time offer can allow you to pay down your balance quicker and pay less interest than you might be able to otherwise. Make at least the same payment as you would with a higher-interest card, and you will be putting more of that payment toward what you owe. In addition, you can use the 3% cash bonus as extra pocket change, or as I would recommend, apply it to your balance and pay off your card even faster.
Where can people learn more about this offer and apply?
Visit macu.com/transfer or stop by any of Mountain America’s more than 100 branches to apply.
*Loans on approved credit. Maximum bonus for the calendar year is 3% of the credit limit on your Mountain America credit card up to $500. Not available on balances transferred from an existing Mountain America loan. Balance transfers will accrue interest from the date the transaction is processed. Cash bonus is considered interest and will be reported on IRS form 1099-INT. Business accounts not eligible. Membership required–based on eligibility. Limited-time offer. Any offer provided by Mountain America can be withdrawn at any time and is subject to change. Offer ends 2/29/24.