It was expected. The Federal Reserve raised interest rates by a quarter of a point. Finance expert Michael Wittenberg says that means 2 things; the Fed believes the economy is solid enough to take a hike in interest rates and your credit card company can now raise the interest rate you pay on your balances.
When can they do it? Right. Now. Yup, that's more money out of your pocket. So, for example, if your interest rate was 13.5% your credit card company can how charge you 13.75%. It's a quarter of a point, it's not huge, but it is your money. The finance experts will tell you the same thing: pay off your balance and you won't have to worry about the interest rate. (Insert eye roll here)
So, let's do some real life solutions:
Make a list of your credit cards and their interest rates. Which ever one has the highest rate, you focus on paying that one off first.
Pay more than the minimum payment. Even if it's just $10 more.
And you can always play the 0% interest transfer game. Just be aware there are three common mistakes with that:
The zero percent is a teaser rate. Don't go for the first card you see. look for one that offers the longest rate.
A lot of people don't read the fine print and the zero percent rate always comes with a transfer fee. Usually it;s 3%. Make sure it doesn't cost you more than what it would have if you just paid the bill.
And lastly, don't forget when the 0% runs out. If you do, it could cost you a whole lot more than with the card you started with.
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