Make room for holiday cheer!

The holiday season brings plenty to look forward to, but for many families, it also brings extra expenses. From traveling to see loved ones to gift-giving and hosting large meals, we know this time of year can put additional pressure on your wallet. 

One option to help cover those extra costs is a personal loan. But why would someone choose a personal loan over a credit card? The answer often comes down to interest rates, repayment schedules, and knowing what to expect each month.  

Did you know? During the 2025 holiday season, Americans added $44 billion to their credit card balances, bringing total U.S. credit card debt to $1.28 trillion.¹ 

With borrowing happening during the holidays, it’s important to understand how interest and repayment can affect what you ultimately pay. 

Understanding the minimum payment trap with credit cards: 

When you receive your credit card statement, you’ll see a minimum payment amount. This is the smallest amount you must pay by the due date to keep your account in good standing. While making the minimum payment helps you avoid a late payment, it doesn’t necessarily help you pay down your overall debt quickly. 

Here’s why: 

• Minimum payments on a credit card are designed to keep your account current, not necessarily pay off your debt quickly. If you only make the minimum payment, it could take years to pay off a balance. 

• You have more flexibility, but less predictability. Unlike a personal loan with a set repayment schedule, credit cards don’t have a defined payoff date. You’re responsible for deciding how much to pay beyond the minimum and how quickly you want to reduce your balance.  

Personal Loans vs. Credit Cards: What’s the Difference? 

So, what other borrowing options are available? One alternative worth considering is a personal loan. 

Personal loans and credit cards both offer ways to borrow money, but the biggest difference is how you repay what you borrow. 

Personal Loans 

When you take out a fixed-rate personal loan, you agree to a specific loan amount, interest rate, monthly payment, and repayment term. Your payment stays consistent throughout the life of the loan, and you’ll know when your balance is scheduled to be paid off. 

This can make a personal loan a helpful option when you have a larger, one-time expense and want a clear plan for paying it back. 

Credit Cards 

Credit cards provide revolving credit, meaning you can continue making purchases as long as you have available credit. You also have flexibility in how much you pay each month, as long as you meet the minimum payment requirement. 

However, if you carry a balance and primarily make minimum payments, it can take significantly longer to pay off what you owe. And because your available credit replenishes as you make payments, it’s easy to continue borrowing while you’re still working to pay down an existing balance. 

We can help make a plan that works for you: 

Whether you’re considering a personal loan or using a credit card, taking time to plan ahead can make a big difference. 

Before borrowing, we can help you find out: 

• How much do I actually need? 

• What monthly payment can I comfortably afford? 

• How much will I pay in interest over the life of the loan? 

• When will I be finished paying it off? 

At Good Neighbors Credit Union, we’re here to help you understand your options and make informed financial decisions. If you’re considering a personal loan for the holiday season, reach out to our team. We’d be happy to walk you through your options and help you find a plan that works for you. 

Good Neighbors Credit Union
716-681-1460 

¹ Source: Federal Reserve Bank of New York, Quarterly Report on Household Debt and Credit, Q4 2025.