Inflation has more Americans relying on credit cards, according to CFPB
BIRMINGHAM, Ala. (WBRC) - Inflation has more Americans relying on credit cards, and you may be racking up more debt because of higher interest rates.
A credit card with a balance of $5,000 could have an extra $1,000 in interest payments over a year, according to the Consumer Financial Protection Bureau. The CFPB expects more people to rely on credit cards to pay for essentials in the coming months due to inflation.
Some good advice is to find out how much interest you are currently paying. You can call your credit card issuer to see if you’d be eligible for a lower interest rate.
Personal finance expert Sara Rathner with NerdWallet says if you have a high interest credit card, find a way to tackle that interest.
“This has the potential to cost you hundreds or even thousands of dollars a year, depending on how much debt you have. And think about all the other things you could do with that money, all the other bills that you could pay and other debt you could avoid because you don’t have hundreds of dollars’ worth of interest,” Rathner said.
Tackling that debt may be daunting. The Balance website offers 10 tips to avoid credit card debt like building up a safety net or emergency fund and always remember to pay credit cards on time. If not, you’ll get hit with late fees.
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