Credit Cards Are Getting More Expensive

APRs Crack 30%

Credit cards are notorious for charging high interest rates and recently those rates have been soaring higher than ever.

Credit cards at major retailers such as Kroger (KR), Macy’s (M), and Wayfair (W) are now charging annual percentage rates — or APRs — of over 30%. This means you could be paying as much as .08% per day in interest if you carry a credit card balance.

Before you go on a holiday shopping spree, consider checking your credit cards to ensure you aren’t getting clobbered by extremely high APRs.

Swipe, Insert, or Tap

During the third quarter, Americans amassed $16.5 trillion in household debt, swiping credit cards at the highest rate in 20 years. Over the same period, prices for everything from food to fuel skyrocketed, resulting in the potentially dangerous scenario of consumers relying on credit cards to pay bills, both of which are getting more expensive.

With this in mind, now more than ever, it’s important for consumers to be vigilant in monitoring credit card usage and debt.

Getting Out of Debt

Having a lot of credit card debt is like having weeds in your garden. If you don’t pull the weeds as they pop up, they can choke out your crops. The same goes for credit card debt and your wallet.

If you carry high balances currently, the first thing to do is look for ways you can cut back on your spending. Consider switching to cash for necessities to help break the habit of swiping your card whenever you need something.

Another option to consider is getting a balance transfer credit card. This is a credit card that offers 0% APR interest rates for 12-21 months. By transferring the debt to a new card, you give yourself at least a year to pay it off, interest-free. If you don’t qualify for a balance transfer card, you could also look into a debt consolidation loan.

Credit cards can be powerful financial tools. But, with rates soaring higher than ever, consumers should remember that with great power comes great responsibility.

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