For those of you who have known us over the years through our books and workshops, you’d know that we would never, ever advocate carrying a balance on a credit card.

The Holiday season provides a perfect illustration as to why. According to the National Retail Federation, the average American will spend $1048 on gifts this Holiday season.

It’s news that brings a tear to the eye of every retailer. But what happens when that holiday merrymaker puts that amount on the average bank credit card?

Well, if they decide to pay the minimum amount ($20) every month on a credit card with an 18% apr., it would take 8.6 years until the full amount was paid off. Ouch. If the minimum amount paid every month was the more common $25, the balance would be paid off in 5 and a half years.

5 and a half years! Are you kidding me? I can’t remember what I did or received last Christmas let alone 5 years ago. A couple of things to point out here:

• First, these timelines assume that you do not add any new purchases during the entire 5 ½ years. How likely is that? If you do add purchases, the debt payments will go on and on.

• Secondly, if you are using a credit card from a major retailer or a big box store those timelines almost double: they usually use a 28% APR, so a $25/mo payment on a $1,048 balance would take almost 14 years to pay off!

A simple way to avoid this nightmare altogether is to use only cash or debit when you go out shopping. But, what should you do if you find yourself in this position? Consider this: if you increased the payment on the bank credit card from $25/mo to $50/mo, you would reduce your pain from 5 ½ years to just over two years.

So, if you have to carry a balance, do so on a card with the lowest APR possible. Then do whatever you can to increase your payments as much as possible. As we’ve seen, even an extra $25/mo can cut your pain by more than 50%. And if that’s not an option, let’s hope that your friends and family aren’t expecting any gifts for another 5 years.