Tips on tackling credit card payments amid rising rates
BIRMINGHAM, Ala. (WBRC) - We are now witnessing a historic effort by the Federal Reserve.
The fed raised interest rates by three quarters of a point on Wednesday to clamp down on inflation.
Financial experts stress the importance of watching your wallet and not adding to variable rate debt, which includes almost all credit cards.
The interest rates you pay on the credit purchases will now see a boost because of the latest rate hike.
Marshall Clay with the Welch Groups stresses you should break down purchases by needs and wants right now.
Clay also stressed caution when it comes to transferring your balance from one credit card to another.
He says short term interest-free offers are often a huge incentive, but the move only works if you remain disciplined.
“Make sure that you’re paying that off immediately month over month. Don’t let that debt roll over so that you’re paying that 21% APR. I mean, that’s where you’re not getting the money. That’s what a lot of these incentives are designed to do. They are designed to kind of bring you in, so you’re incentivized to spend more. Credit cards know a lot of people will overspend and therefore they are paying them interest. That’s how they are making their money,” said Clay.
Unfortunately, the fed expects they will be forced to raise rates again, so caution will be critical in the months ahead.
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