Despite sky-high interest rates, Americans are charging record amounts to their credit cards as the holiday shopping season heats up.
Failing to pay down those card balances on time is costlier than it’s been in decades. To combat high inflation, the Federal Reserve has raised interest rates this year at the fastest clip in 40 years. Those hikes have pushed credit card interest rates to
Ted Rossman, senior analyst at Bankrate.com, suggests stacking discounts. If you have a rewards credit card, for example, look for opportunities to combine cardholder perks with store discounts. The goal is to “find multiple ways to save on the same purchase,” he says. “Use the rewards credit card, assuming that you’re going to pay in full and avoid interest, but combine that with other things like a store coupon or coupon code.
“I think that probably tells you that people are looking for whatever help they can find to extend their holiday shopping budget,” says Matt Schulz, LendingTree’s chief credit analyst.an average 3.8 cards by the end of 2020 And with fees and rates for new store cards even higher than the current record levels for traditional credit cards, “many people’s financial margin for error is basically zero,” Schulz says. In other words, if you think there’s even a chance you’ll miss a payment or carry a balance, don’t sign on the dotted line.
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