INDIANAPOLIS — Credit card debt in America is the highest it's ever been. It comes at a time interest rates are also at an all time high.
As we head into the holiday shopping season, credit card experts are warning people not to be enticed by a deal.
"Credit card debt is one of those things that is easy to get into and hard to get out of," Ted Rossman, a financial expert said.
Rossman works for bankrate.com which recently put out a new report showing interest rates for credit cards are at an all time high.
"Sometimes it works, but a lot of times it doesn't. So you really need to be thoughtful about it," Rossman said.
It's no secret the cost of basically everything is much higher than is use to be.
That includes the cost of having a credit card from a retailer.
"It does become a security for some people and they have to spend it but if you can avoid it, avoid it," one Indianapolis resident said.
The sentiment stands true with financial experts. Many say if you use a credit card, pay off the whole balance at the end of the month.
"Your credit utilization is the second biggest factor impacting your credit score. So when you're maxing your credit cards out that can have a very significant impact on your credit score," Christina Roman, a consumer education and advocacy manager for Experian said.
Roman said it's important to try and spend within your means. She says keeping a check on your credit is also beneficial.
With the average interest rates at record highs for retail credit cards, it can be a balancing act to stay on top.
Bankrate reports show interest rates for general purpose credit cards are at an average record high of about 21%.
Retail credit cards have an interest rate of about 8 points higher, coming in at about 29%.
"In part it reflects that these cards are easier to get they're not as selective about credit quality and that leads to higher rate," Rossman said. "Sometimes it works, but a lot of times it doesn't. So you really need to be thoughtful about it. Don't fall for that sales pitch impulsively. It's totally fine to say no thanks, or not right now, or I'm going to think about it. "
Bankrate does point out that retail credit cards can help you build your credit score even if you have limited or spotty credit history.
But for that to work out in your favor you have to make sure your payments are on time and pay off your balance before any promotional period ends.
If you're trying to build credit, make sure the retail card you choose reports your activity to credit bureaus because not all of them do.