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.
-
Indiana Task Force One activated for Texas flood response
In a swift response to the catastrophic flooding in Kerr County, Texas, Indiana Task Force One has been activated and is en route to provide critical assistance.
Whitestown’s proposed water utility sale: What residents need to know
Town leaders are considering selling Whitestown’s water utility to Citizens Energy Group. It's a move town officials say could bring lower rates and more reliable service, but would shift control.
Caitlin Clark set to return for Indiana on Wednesday after missing 5 games
Caitlin Clark expects to play Wednesday when the Indiana Fever host the Golden State Valkyries after missing the past five games with a left groin injury.
Indiana author's new book explores pathological demand avoidance (PDA)
A new children's book written by an author and neurologist from Indiana explores the love and connection between a mother and her son while navigating emotional challenges.
