CHARLOTTE — Credit card interest rates have started to rise.
The Bankrate Group predicts that the average credit card interest rate could reach 19% by the end of the year, which would be a record.
Obviously, it’s good if you can pay off your credit card in full each month, because that means there’s 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 that you can make more than one payment per month. Every little gesture counts. You don’t have to wait for the end of the billing cycle.
Second, the NerdWallet group says that if you have a big purchase coming up, you might want to open a new credit card, offering 0% interest. But be sure to use it wisely. You don’t want this to become another source of debt.
“It’s basically getting an interest-free loan. Just keep in mind that once the promotional period is over, the interest rate will go up,” said Sara Rathner of NerdWallet.
Third, consider a personal loan. You can consolidate your debt, pay it off at a lower rate, and have a fixed payment each month.
Fourth, don’t be afraid to negotiate.
“The answer could be yes, in which case this call was 100% worth your time,” Rathner said.
Fifth, consider 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 free ones.
- The interest rate will increase after the end of the promotional period.
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