The average national credit card debt at the end of 2023 was $6,864.* Currently, the average interest rate for credit cards is just over 21% APR**. Let’s examine what these figures can mean to your financial future.
Assuming you owe the national average of $6,864 and you’re currently paying 21%. If you make a monthly payment of $200, it will take you 53 months to pay off your debt. You’ll pay $3,716 in interest.
Now, let’s run the number with an 8.99% APR. Using the same monthly payment, you’d pay off the debt in 40 months, and the interest would be $1,100, for a savings of $2,616. Imagine what you could do with that extra money. Start or add to an emergency fund, pay for a vacation or educational expenses, or put money into a savings account or certificate that earns you money.
We understand inflation has made it hard to make ends meet. And for many people, credit cards are a helpful tool. But like any tool, you must know how to use it. Here are a few tips to help manage your credit cards so they don’t manage you.
- Save before you charge: It’s easy to use your credit card for big-ticket purchases. But this can lead to big balances and big interest payments. If you can’t pay for the item in cash, why not split the bill? Save up cash and use it for half the purchase price and charge half on your credit card. If you have to pay off the credit card bill over months, you’ll have a smaller balance and interest payments from the start.
- Stay low: If your credit card spending limit is high, ask your credit card company to lower it. This could help prevent you from charging more than you can handle paying off monthly, saving you money on interest.
- Put your card away: The out-of-sight, out-of-mind approach can help you avoid using your credit card too often. Keep your credit card in a safe place at home and only carry it when you know you’ll need it. Using your card intentionally can prevent you from using it too often and racking up a large balance from dozens of small charges.
- Limit the number of cards you have: More cards, more problems. Having multiple credit cards with various limits can lead to multiple high bills and high interest payments. See if you can manage your finances with only one or two credit cards. And, as mentioned above, keep a low spending limit on each.
- Use your debit card: The advantage of debit cards is the money comes directly out of your savings or checking account, so there’s no debt to repay as with a credit card. If you spend more than you have in your account, you could be charged a significant overdraft fee if you don’t have overdraft protection, so be aware of how much money you have in your account linked to your debit card before you use it.
Three ways to get your credit cards to work for you.
If you plan on including credit cards as part of your financial life, make sure they offer you something in return beyond the convenience of not carrying a lot of cash. The most common rewards credit cards offer are cash back, points, and a low interest rate. Whichever you prefer, we’ve got you covered.
- Cash-back bonus: The beauty of cash back is that it lowers the cost of everything you buy in the form of cash back. Our Crystal Visa® earns you up to 3% cash back on most purchases for 12 months.† After that, earn up to 2.5% cash back on purchases.
- Points and more points: If points are you’re thing, apply for our Visa® Platinum.† You get 1.5 points per dollar spent. Use your points for travel, cash, or merchandise. There’s no annual fee, and rates start at just 10.99% APR.
- Lower interest rate: Having a credit card with a low interest rate can save you significantly all year. Our Select Visa® comes with a rock-bottom rate, as low as 8.99% APR†, for purchases and balance transfers. Plus, there are no setup or maintenance fees, so you keep more cash in your pocket.
It’s bonus time.
Here’s another reason to apply for one of our credit cards. Enjoy 0% intro APR+ for the first six months after you open any of our credit cards. And when you spend $5,000 in the first three months, you’ll receive a $100 statement credit.† Just another way we’re looking out for you.
A bonus on our bonus.
To celebrate summer, you can now get 5% cash back on gas and groceries whenever you use your Crystal Visa®. Earn 5 points per dollar when you use your Visa® Platinum to gas up your vehicle or fill up your shopping cart with groceries. This special bonus ends September 30, 2024.‡
Final thoughts.
There are many ways to manage your credit cards to help you stay out of debt. The two best are not using your credit card, which we know is very challenging for most of us. Or, when you do use your card, pay off the entire balance every month. If that’s not possible, we hope you try the tips above to manage your credit cards so they don’t manage you. If you find yourself overwhelmed by credit card debt, please know there is no such thing as a government-sponsored program for credit card debt relief. However, the Federal Trade Commission is an excellent place to learn about getting out of debt.
*Schulz, Matt; Shepard, Dan, “2024 Credit Card Debt Statistics,” Lendingtree.com. 8 July 2024. Accessed 17 July 2024.
**Schulz, Matt; Shepard, Dan, “Average Credit Card Interest Rate in America Today,” Lendingtree.com. 8 July 2024. Accessed 17 July 2024.
†$100 Bonus for New Credit Cards for: Crystal Visa, Select Visa & Visa Platinum: A $100 (one hundred dollars) bonus will be paid in the form of “Visa Statement Credit” when at least $5,000.00 (five thousand dollars) is spent in purchases within the first 3 months (qualifying period) of the “New” Visa card opening. Bonuses will be paid out within 90 days after the qualification period. Example: If a card is activated on January 1, 2021 and the total of qualifying purchases for the months of January, February and March is at least $5,000, the primary borrower will receive a Bonus of $100 (one hundred dollars) no later than July 1, 2021. Limit of one reward/bonus per member number. Qualifying transactions must “post” to the designated account during the qualified period. All qualifying purchases will count towards the $5,000 in spent purchases unless return for credit of any of the qualifying transactions takes place within 90 days of the end of the qualifying period. Transactions may take two business days from the date of purchase to post. Member must be in good standing to be eligible for bonus. New accounts are subject to FIGFCU approval and all other terms and conditions apply. This offer is valid only for individual account /card holders, is non-transferable and cannot be combined with any other offer. The $100 Bonus is a product promotion sponsored by FIGFCU and may be discontinued at any time. Visa is a registered trademark.
Zero Percent (0%) Introductory Rate Promotion for purchases, is offered for new FIGFCU Visa Platinum® Credit Card account holders. This incentive offer, is not available to those members who are opening a new Platinum Visa® and had an outstanding balance or a closed FIGFCU Zero Percent Loan account and/or had any FIGFCU Visa® Credit Card within the last year. If you are in an introductory rate promotion period, you are not eligible to transfer other loan balances, line of credit balances, credit card account balances or CASH Advance to take advantage of the introductory rate promotion.
Select Visa® Zero Percent (0%) Introductory Rate Promotion for purchases, is offered for new FIGFCU Visa® Select Credit Card account holders. This incentive offer, is not available to those members who are opening a new Select Visa and had an outstanding balance or a closed FIGFCU Zero Percent Loan account and/or had any FIGFCU Select Visa® Credit Card within the last year. If you are in an introductory rate promotion period, you are not eligible to transfer other loan balances, line of credit balances, credit card account balances or CASH Advance to take advantage of the introductory rate promotion. For full disclosures visit, figfcu.org/select-visa.
Blue Visa is a Share Secured Credit Card requiring deposited funds to be placed on hold with the Credit Union. Your Account is secured by the designated shares you have in a share account, be it an individual or joint account.
These pledged shares will secure your account. You may not withdraw amounts that have been specifically pledged to secure your Credit Card Account until the Credit Union agrees to release all or part of the pledged amount.
+APR = annual percentage rate. Rates include discounts for Direct Deposit into a Farmers Insurance Federal Credit Union Checking Account and Automatic Payment/Folio Deduction. Rates are subject to change at any time.
The balance transfer amount from other Farmers Insurance Federal Credit Union credit cards will retain its current rate (i.e., Visa Select at 8.99%, Visa Platinum at 10.99%, until the transferred balance is paid off. APR=Annual Percentage Rate. Rate quoted is the lowest rate possible for qualified borrowers and is subject to change. Qualification is based on credit history, debt, and the ability to repay. Your rate may vary. All loans subject to credit approval. The newly opened Credit Union credit card’s rate will only apply to new transactions. Any balances on the previous Credit Union credit card must be paid off at the prior credit card’s rate.
Crystal Visa® Zero Percent (0%) Introductory Rate Promotion is offered for new FIGFCU Crystal Visa® account holders. If you are in an introductory rate promotion period, you are not eligible to transfer other loan balances, line of credit balances and credit card account balances to take advantage of the introductory rate promotion. For full disclosures, visit figfcu.org/crystal-visa.
‡Visa Platinum & Crystal Visa 5x Gas and Groceries Promotion: Target® and Walmart® purchases not included. Earn 5X rewards on up to $1,500 worth of qualifying gas and grocery transactions made on or between July 1, 2024 and September 30, 2024. Qualifying gas and grocery transactions must have the required merchant code signifying the transaction for purchases for gas and grocery transactions (merchant codes 5542, 5541, 5411, 5300). Transactions within other establishments do not apply and we do not control how merchants are categorized. We do not evaluate whether merchants correctly identify and bill transactions; however, we do reserve the right to determine which transactions qualify for the bonus rewards offers. Rewards may mean cash back or points for your program. Cash advances and balance transfers are not eligible for rewards. To earn bonus rewards, you must be a cardholder currently in good standing. Allow up to two billing cycles for bonus rewards to post to your account. All purchases are subject to credit approval. All loans are subject to approval. Terms and conditions subject to change. Some restrictions may apply.
