ATLANTA — The interest you are paying on credit cards could keep you in debt for years.
Consumers are expected to spend over $940 billion this holiday season according to the National Retail Federation. Much of that spending will be done using credit cards.
Ted Rossman with Bankrate says that debt hangover could be compounded by the interest rates you’re paying on your credit card.
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“I do worry about that. I think this year, more than most, there could be a real holiday debt hangover in January when the bills arrive because we know inflation’s high,” Rossman said. “Interest rates are at record highs right now. on credit cards, the average is 19.42%. and we’ve been tracking this since 1985. this is the highest we’ve ever seen,” Rossman said.
And that number goes up when it comes to store credit cards. In some cases, you could be paying as much as 30% in interest!
Using those credit cards when you can’t afford to pay the bill is a way to basically borrow money short term that then ends up being a long term thing.
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Channel 2 consumer adviser Clark Howard says if you’re not able to pay your balance in full to try and transfer your balance to a zero-interest card.
“Transfer to a credit card with a lower interest rate. Even in the midst of these very high-interest rates on credit cards, people with good credit scores are able to move their money to lower-interest cards,” Howard said.
Making your payment every month is the key to charges not stacking up.
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