The average interest rate on credit cards just broke a decades-old record this month when it hit 17.96% – the highest since 1996, according to Bankrate data. Additionally, Federal Reserve Chairman Jerome Powell has made it clear that rates aren’t going to come down anytime soon, after recently suggesting that future hikes would cause “a bit of pain for households and businesses.” And Ted Rossman, senior industry analyst at Bankrate, notes: “The best estimate, according to investors, is that rates will rise another 150 basis points by the end of the year.”
For those with credit cards, this means your rate could fluctuate accordingly. “Rate hikes typically affect new and existing balances,” Rossman said, adding that “most credit cardholders are now facing rates that are 225 basis points higher than they were a year ago. barely six months.
What if you have a credit card with a high interest rate? Of course, your best bet is to pay your bill in full and on time, so you never pay interest, but we understand that’s not always possible. Here are some ways, if you’re diligent, to pay less on your debt.
Consolidate your debts with a personal loan
If you can get a lower rate on a personal loan – see the lowest personal loan rates you can get here – than with your credit card, it might be a good idea to consolidate your credit card debt with a Personal loan. Remember that if you don’t repay your personal loan, your credit score will take a hit.
Switch to a 0% balance transfer card and redeem the card before the end of the 0% period
A number of credit cards are now offering 0% balance transfer offers – you can use this tool to find a credit card that might suit your needs – and if you’re warned, it can save you a lot of money. ‘silver. But remember that most of these offers are for a limited time (like 0% for 12 months), and with potential rate hikes on the way, you’ll want to make sure to pay them off relatively quickly or else you’ll be risking rates. high on debt.
Consolidate your debt with a HELOC
These tend to have far lower rates than personal loans — see the lowest HELOC rates you can get here — but the risk is that you could lose your home if you don’t pay off a HELOC.
Look for a low interest credit card
Many maps have lower than average starting rates. And even a few points off your interest rate can have a big impact on your bottom line.
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