Apple FCU Tips Help Holiday Shoppers Keep Credit Intact

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Provided by Apple Federal Credit Union

The race to make a list and check it twice has officially begun. Experts are predicting U.S. consumers will be spending four percent more over the holidays than they did last year. Apple Federal Credit Union, which has 22 branches throughout Northern Virginia, released tips on getting through that holiday shopping list without marring credit and incurring big debt.

“Accounting giant Deloitte predicts that the average household in the U.S. will spend more than $1,200 this holiday season,” says Jeffery Long, CPA, Chief Lending Officer at Apple Federal Credit Union.  “That means consumers will need to be savvy to get everything on their lists and not end up spending months paying it off or potentially damaging their credit. What some don’t realize is that poor credit does not just impact your ability to get a loan, but even rent an apartment or acquire insurance at good rates.”

Following these shopping tips from Apple Federal Credit Union will help consumers keep the holidays merry:

  1. Don’t Get Lured in with the Small Store Discounts. Stores attract customers to their credit cards through special deals and discounts. But beware that the 10 percent discount you get at the checkout counter for signing up for the store credit card often comes with sky-high interest rates, as the average retail card APR has risen for the third straight year to 24.99 percent, compared to the average general-purpose credit card APR of 16.15 percent.  In addition, your credit score can take a hit for applying, even if you cancel it the next week.
  2. Beware of the Time Limits on Deferred-Interest Deals.  These deals allow customers to avoid interest entirely if a purchase is paid in full during an allotted time frame. But if the balance isn’t paid off in full by the promotion end-date, the cardholder is hit with interest charges on the entire purchase, dating back to the original purchase date. If the payments are made on schedule, these can be good deals, but know the terms and penalties.
  3. Set a Plan to Pay Off Your Cards. If you owe a balance on more than one account, choosing an amount each month and divvying it up equally among accounts is not advisable. The same goes for paying just the minimum amount due on your accounts. Instead, pay off the highest interest-rate card first. Get rid of the debt that is costing you the most as soon as possible. But be sure to maintain on-time minimum payments on your other accounts.
  4. Be Aware of the Limited Promotional Period to Transfer Balances. Balance transfers can be an efficient way to pay off debt using a lower or zero interest rate card. But know that they come with a limited promotional period. Refrain from using the new card for additional spending without paying off the original balance before the introductory period expires. Also, remember you will be charged a transfer fee so do the math and ensure it’s still a good deal.
  5. Remember that Rewards are for Cardholders Who Don’t Carry a Balance. Consumers who use credit cards and pay them off over a few months should not play the credit card rewards game. Card APRs average 16.24 percent on rewards cards and 16.4 percent on cash back cards, according to’s most recent interest rate report.  Paying a month of interest negates the value of any rewards you accrue. Paying more in interest than you’re earning in rewards is a losing proposition.

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