How To Avoid Record-high Interest Rates On Credit And Debit Cards
How To Avoid Record-high Interest Rates On Credit And Debit Cards
As the Federal Reserve keeps increasing its benchmark rate, average credit card interest rates are on their way to reaching an all-time high.
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As of Wednesday, the average annual percentage rate, or APR, was 17.25 per cent. That is an improvement over the 16.3 per cent recorded at the beginning of the year and just shy of the 17.87 per cent record set in April 2019.
Gina McKague, founder of McKague Financial in Livonia, Michigan, offers these tips to lower your credit card interest rate and keep your payments under control:
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How To Avoid Record-high Interest Rates On Credit/Debit Cards
- Build up a healthy credit score. Having a higher credit score proves to lenders you’re able to pay back loans, which in turn can typically give you a lower credit card interest rate.
- Shop around and negotiate for the best rate. Shop around different credit card companies and find out which one will give you the lowest rate. Not every creditor will start out with the same offer but you can negotiate. Lenders will often match rates to gain a customer.
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- Review your credit cards annually. Each year, take time to review how high of an interest rate you’re being charged. If you’ve been a good-paying customer, ask the creditor to have your rate lowered.
- Take advantage of new offers. If you carry a balance each month and interest is being charged, consider rolling it over to a card that is offering 0% interest. Just be sure to pay off the balance before the offer expires.
- Pay off your bill at the end of each month. If you’re paying your bill in full each billing period, then you’re avoiding being charged interest and don’t have to worry about it.
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