INDIANAPOLIS — Rising interest rates coupled with high inflation — are forcing more Americans to reach for the plastic when it comes to paying for things, but it all comes with a warning.
When interest rates increase, historically so do credit card rates, meaning it is more expensive to use them and will cost more to pay back any debts.
Right now, credit card minimum interest rates are averaging some 18%, according to LendingTree.
“That is at a historic high as well, so a lot of you know consumers. Basically half of those, I should say, that carry credit card debt are month to month,” Central-Indiana based financial expert Roy Lederman said.
Financial experts urge consumers to pay off credit cards and pay them off on time. The best advice to keep out of credit card debt it to budget. For instance, consumers should look at subscription services and see if several could be cut.
“Find ways that you can actually save and apply more money towards that debt. So you know, eventually you'll get out of debt faster,” Lederman said.
Another tip from Lederman for those who may already be in credit card debt, use the thirds rule, which means put a third of any discretionary income towards paying off those bills.
For those in debt, economists and financial experts urge you to pay it off as soon as possible.
In the meantime, other tips to avoid worsening that debt includes paying down the balance and looking to use zero balance transfer cards.
“That’s what, by the way, the Federal Reserve is hoping you'll do is instead of going out and buying something new going on a trip using your credit card that you'll pay off that debt that will slow the economy we hope just a little bit,” Dr. Michael Hicks, Director of the Center for Business and Economic Research at Ball State University, said.
-
St. Vincent ER doctor warns of rising winter storm injury cases
This winter storm isn't just making travel tricky — it's sending more people to the emergency room with weather-related injuries.
How does this winter storm measure up to the Blizzard of 1978 in Indiana
For long-time Hoosiers, when snowstorms are in the forecast, the Blizzard of '78 comes to mind. Did the storm compare to the historic Blizzard of '78?
Dangerous road conditions persist across Indiana as cleanup efforts are underway
With the snow finally ending, the focus shifts from battling the storm to restoring normalcy across Indiana, and that's exactly what agencies like INDOT and ISP are focusing on right now.
Indy DPW crews work overtime as some residential streets remain snow-covered
While major roads have been cleared, numerous side streets and neighborhood roads on the city's north side and throughout Indianapolis have yet to see a plow, according to residents.
