CHARLOTTE — Credit card interest rates have started going up.
The group Bankrate predicts the average credit card interest rate could hit 19% by the end of the year, which would be a record.
Obviously, it’s great if you can pay off your credit card in full each month because that means no interest. But if you can’t, Action 9′s Jason Stoogenke says there are things you can do to combat high interest rates.
First, remember, you can make more than one payment each month. Every little bit helps. You don’t have to wait until the end of the billing cycle.
Second, the group NerdWallet says if you have a major purchase coming up, you may want to open a new credit card, offering 0% interest. But make sure you use it wisely. You don’t want it to become another source of debt.
“It’s essentially getting an interest-free loan. Just keep in mind that once the promotional period is over, the interest rate is going to go back up,” said Sara Rathner with NerdWallet.
Third, consider a personal loan. You can consolidate your debt, pay it off at a lower rate and have a set payment each month.
Fourth, don’t be afraid to negotiate.
“The answer might be yes, in which case, that call was 100% worth your time,” Rathner said.
Fifth, think about consolidating your debt with what’s called a balance transfer credit card.
“These are potential options that can give you a year or more at 0% interest. It can save you hundreds of dollars if you have a balance of several thousand dollars,” Rathner said.
But a few words of caution about the last one. NerdWallet says:
- Usually, you need good credit to qualify for these cards.
- Most of these cards charge a transfer fee (usually 3-5%). But there are some free ones out there.
- The interest rate will go up after the promotional period ends.
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