Throughout life’s journey, St. Thomas Federal Credit Union is here to help you reach your financial goals. Money 101 is our ongoing education series—built for the people of the Virgin Islands—to show practical ways to get the most out of your money so you can get the most out of life.
A lot of families need to spread the costs over time, so holiday expenses tend to end up on a credit card, with a plan to sort it out in the New Year. That plan can get expensive quickly. Credit card interest rates average well over 20%, so paying only the minimum can keep a holiday balance stubbornly sticking around for months or years.
Christmas Loans
Through December 31, St. Thomas Federal Credit Union members can apply for a Christmas Loan:
- Borrow from $500 to $3,000
- Rates as low as 8% APR*
- Up to 24 months to repay
A Christmas Loan works differently from a card. You borrow a set amount at a fixed rate, with one set monthly payment and a payoff date you know from the start. Paired with a rate far below the typical credit card, that means more of each payment goes toward what you borrowed and less goes to interest, saving you money.
Planning Your Budget for Christmas
Holiday shopping on a credit card tends to happen a little at a time, as you buy gifts one by one over the weeks leading up to Christmas. Each purchase feels relatively small, so it’s easy to lose track of the total until the December statement arrives. By then, whatever you can’t pay off right away starts collecting interest.
A Christmas Loan helps you plan and budget for what you can comfortably afford. You decide on the total to borrow in advance, so you know what you’ll spend and what your payments will be before you shop.
Before you apply, write down your best estimate for what the holiday will cost you: gifts, groceries, travel, decorations and anything else you might need.
Add it up and borrow close to that total or maybe a little more, if you want some wiggle room in case of unexpected expenses, like a last-minute gift.
Then pick the term that fits your budget. A shorter term means a higher monthly payment but a lower total cost, since you pay less interest. A longer term keeps monthly payments lower. If you want this Christmas paid off before the next one comes, a term of 12 months makes sure of it.
Already started holiday shopping on your credit card? A Christmas Loan can help you too! A Christmas Loan can help you pay down your balance at a lower rate and save money in the long run.
Get a Head Start on Next Year
You can also pair your Christmas Loan with a Christmas Club savings account. Setting a little aside each month throughout the year means next year’s Christmas list can come partly or completely from your savings.
Check Christmas Off Your List
Christmas Loans are available through December 31. Apply online, give us a call or drop by the branch. We’re happy to help walk you through your options. From all of us at St. Thomas Federal Credit Union, have a merry Christmas!
And stay tuned to this website for more helpful Money 101 articles that will help you achieve your financial goals.
*Loans subject to credit approval. Restrictions may apply. Rates and terms may change. Federally insured by the NCUA.