Christmas Credit Card- How to Avoid Credit Card Interest


Offers for credit cards are in full swing during the holiday season. They’re coming from every direction faster than you can sing We Wish You A Merry Christmas. Flooding your mailbox, inbox and every retail check out teasing you with 18 months interest free or sign on bonus offers.  

The compelling nature of swiping now and worrying about high interest later is deceiving. We are here to say there’s alternative ways to borrow without paying heaps of interest long term.  

Click here to check out some of the best credit cards.

Why Are Credit Card Interest Rates So High?

Although credit cards are great for establishing and improving your credit score, you might be in a situation where you have no credit, poor credit or you’re already in debt because of high interest credit cards or loans. Education and understanding how credit cards work is vital in order to practice responsible financial habits before you start borrowing money.  

Lets face it, credit card companies are in business and you’re their customer. They make their money off the interest they charge from lending you money. If you miss or forget a payment, expect fees and penalty interest rates to be added to your existing payment.  

Sign up bonuses are great, if you plan to pay the card in full before the offer expires. If not, the regular APR will apply to any unpaid and future amounts used on the card. Credit card interest rates are commonly above 20% or more, especially if you have zero to poor credit. 

One MoneyLion member had a credit card with 27.99% APR before utilizing our competitive interest rate Credit Builder loans. Click here to learn about common credit card questions.

Does Credit Card Interest Accrue Daily?

Yes, although APR means annual percentage rate, you’ll need to convert your APR to a daily rate. To do this you would need to divide the APR by 365 (some banks do 360 but the difference is barely noticeable). That rate is called the daily periodic interest rate.  

After figuring out your daily rate you need to review your billing period, day by day, and figure out each days balance.  Then, add up all the daily balances and divide by the number of days in the billing cycle.  That number is your average daily balance. 

Finally, multiply your average daily balance by your daily rate. Whatever that number is,  multiplied that number by the number of days in the billing period. This is the formula to figure out how your interest is calculated.  Whew!

Credit Card Alternatives

Credit card interest can be difficult to understand (as seen above), especially if your lender issues compounding interest daily or monthly.  Unless you plan to pay off your credit card in full every month, revolving interest is to be expected.  

Another common form of borrowing during the Christmas season is a payday loan. Our advice?  Run and never look back. These predatory loans, in some states, have low consumer protection and outrageous interest rates.  

Need cash now and want to avoid the high interest options?  Consider an alternative from MoneyLion with Instacash, Credit Builder Loan and Early Paycheck from RoarMoney. 


A perk for being a RoarMoney account holder, you can borrow up to $250 with 0% interest, no fees and no credit check. Download the mobile app, link your checking account and borrow instantly! 

Early Paycheck

Sometimes waiting to get paid can result in late bill payments. Wave bye-bye to those late fees when you have linked up direct deposits to your RoarMoney account. You can receive your paycheck up to 2 days early.  Find out more details here

Credit Builder Loan

Need a little bit more than our Instacash tool offers? A Credit Builder Loan from MoneyLion is perfect when you need to borrow up to $1000.  

In order to qualify for a Credit Builder loan you must link a primary checking account allowing MoneyLion to securely review your financial history to determine your eligibility and competitive interest rate.

This type of loan is a beneficial alternative to someone looking to improve their credit score (your payments are reported to all 3 credit bureaus every month) and borrow with affordable payments. 

Check out the table below to compare MoneyLion products to other borrowing options. 

InstacashEarly Paycheck with RoarMoneyCredit Builder LoanPayday LoanCredit Card
Interest Rate0% APR0% APRCompetitive APRsUp to 460%Up to 29.99%*
FeesFree$1/month$19.99/month feeYesYes
Credit Check?NoNoNoVariesYes
Wait TimeInstantly*InstantlyInstantlySame DayAvailable once you receive card

*Instacash Turbo (instant) delivery of funds is $3.99-$4.99. Credit card APR may vary. 

Avoid Credit Card Debt and Bank With MoneyLion

Considering 35% of your overall credit score is based on on-time payments and history, being about to afford your payments is a must.  When your interest rates from credit cards or payday loans are sky-high, that might feel impossible.

Borrowing for holiday shopping can be done without ending up in a mountain of debt when you bank with MoneyLion. Download our app to help you avoid perpetual credit card debt and get cash today!

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