{"id":9675,"date":"2022-11-13T11:04:10","date_gmt":"2022-11-13T15:04:10","guid":{"rendered":"https:\/\/kerryhannon.com\/?p=9675"},"modified":"2022-11-13T11:04:10","modified_gmt":"2022-11-13T15:04:10","slug":"credit-card-interest-rates-hit-record-high-what-to-do-now","status":"publish","type":"post","link":"https:\/\/kerryhannon.com\/?p=9675","title":{"rendered":"Credit card interest rates hit record high, what to do now"},"content":{"rendered":"
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Credit card interest rates reached their highest level in 37 years, according to one measure, rising at the fastest clip on record since the start of the year.<\/p>\n

The average credit card APR hit 19.04% in the second week of November, according to Bankrate\u2019s\u00a0database<\/a>\u00a0that dates back to 1985, topping the previous record of 19.00% in the first week of July 1991. The rate has jumped 2.74 percentage points since the start of the year, the largest year-to-date increase.<\/p>\n

Read on Yahoo Finance<\/a><\/strong><\/p>\n

The rapid rise in rates this year underscores how much the\u00a0Federal Reserve\u2019s efforts to fight inflation<\/a>\u00a0affect borrowing costs and how quickly interest could accumulate for Americans who carry credit card debt.<\/p>\n

\u201cIncreases tied to Fed actions typically show up on cardholders\u2019 statements within a billing cycle or two,\u201d Ted Rossman, senior industry analyst at Bankrate, said in a statement. \u201cAnd Fed rate hikes affect new and existing credit card balances.\u201d<\/p>\n

Here\u2019s what you can do.<\/p>\n

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First, understand what\u2019s at stake when it comes to rising interest rates. Say you owe $5,000 in credit card debt and pay just the minimum, it would take you 185 months and $5,517 in interest to pay off your debt at the 16.3% rate from the start of the year. Now at 19.04%, that increases to 191 months and $6,546 in interest. That\u2019s real money and time.<\/span><\/div>\n<\/div>\n

One way to reduce those balances quickly is to sign up for a 0% balance transfer card, if you qualify. You can shift your current high-cost credit card debt over to a new card with a 0% promotional rate lasting as long as 21 months. There is, however, a 3%-5% transfer fee, but that long interest-free period will give you some breathing room to start paying the balance down.<\/p>\n

Automating your monthly payments from your checking account for recurring bills and paying more than the minimum is the ticket to getting a grip on the debt and whittle away at it.<\/p>\n

Alternatives also include a low-rate personal loan, perhaps as low as about 6% over five years if you have strong credit, Rossman said.<\/p>\n