June 18, 2018
Carrying a credit card balance is going to cost you even more, as the Federal Reserve continues to hike interest rates.
Brian Karimzad, vice president of research at CompareCards, says we're already at an 18 year high.
"The average credit card interest rate is now 15.32 percent and with the Fed's rate hike this week, all of that is going to get passed through to your credit card rates, so those will go up to 15.5 percent of higher within one or two billing cycles,” he said.
If the Fed keeps raising rates, we could cross 16 percent for credit cards well before the end of the year, Karimzad told me.
That means the goal for anyone who carries a balance on their credit cards is to pay down those balances as quickly as possible.
Remember: Simply making the minimum payment isn't going to get you there.
"Please do not pay attention to the minimum payment you see there. That's not going to move much with these rate increases,” Karimzad said. “What is going to happen is it's going to take much longer for you to pay off your debt because of these higher rates. So, pay down as much as you can above that minimum payment."