Your holiday credit-card bills are going up. What you can do to ease the pain.
The government may have lost a month of inflation data, but don’t expect your credit card’s annual percentage rate to decline because of it.
Holiday credit-card bills are likely to be higher this year, and consumers are feeling the pinch. The annual percentage rate (APR) on credit cards is not expected to decrease despite the government's loss of a month of inflation data. This is because credit card APRs are often tied to broader market interest rates and the prime rate, which have been steadily increasing.
The current trend of rising interest rates has been driven by the Federal Reserve's efforts to combat inflation. As a result, credit card issuers have been increasing APRs to maintain profit margins. Consumers who carry a balance on their credit cards will likely see higher interest charges, making it more challenging to pay off debt. To ease the pain, consumers can consider strategies such as paying more than the minimum payment, consolidating debt to a lower-interest loan or balance transfer credit card, or negotiating a lower APR with their credit card issuer.
To watch next: The Fed's future interest rate decisions and how they impact credit card APRs. Additionally, consumers should keep an eye on their credit card statements and consider reaching out to their issuers to discuss potential relief options, such as temporary hardship programs or lower APRs. As the economy continues to evolve, it's essential for consumers to stay informed and proactive in managing their debt to minimize the impact of rising interest rates.
Originally reported by marketwatch.com. FundNews adds analysis for finance & markets readers.