Interest rates are expected to start rising soon.
That means that carrying a balance on your credit card could cost you more.
How high are the rates rising?
Credit card debit increased by $52 billion during the last quarter of 2021. According to the Federal Reserve, that is the largest quarterly increase in 22 years.
Interest rates are expected to rise soon to combat inflation. Inflation has climbed 7.5% last month, which is the fastest pace in 40 years.
The rising rates means that now is the ideal time to pay off or down your credit card balances.
If you pay your credit card bill in full monthly, you don’t need to worry. But, if you are carrying a balance, it will cost you more as rates increase.
How can I save some money?
- Pay off or down any existing credit card debt
- snowball method- start by paying off your smallest debt first, regardless of interest rates.
- avalanche method- start by paying off the debt with the highest interest rate first.
- Transfer your balance to a 0% credit card
- Focus on paying sown card debt, not earning points or cashback
- Consider getting additional sources of income
- a part-time job
- cut back your expenses
- sell stuff around the house that you don’t use
- Use your debit card or cash instead of your credit card
- Leverage your credit with a 0% credit card