Higher interest rates, coming soon to a credit card near you

Checking Credit Card

If you’re the type of credit card users who deal with high interest rates, we have some bad news for you: the Federal Reserve is expected to announce an increase this week. Also, the worse part is that finance experts expect at least 3 more increases by the end of 2018.

Basically, you will take some extra money out of your pocket if you owe any debt and the interest rate is not locked in.

The announcement will after many debt holders

According to a report from Komo News, experts believe that the interest on your credit card could go up within 1 to 2 billing cycles, right after the announcement will be made by the Federal Reserve. And your credit card score, even though it’s a very good one, won’t matter at all.

“Look to pay off that balance. Pay it down aggressively. Transfer your balance to a low rate card,” says Greg McBride, Chief Financial Analyst at Bankrate.com.

If you have a good credit, a lot of banks will offer zero percent interest rate on balance transfers, for a period of up to 15 months. Still, you need to be very careful, as the zero percent doesn’t apply to any new charges. And this is actually the point in which a lot of people ‘loose the battle’.

“You have to hold yourself accountable to get that debt paid off once and for all before the expiration of that period because otherwise, then you’re in a position where your rate goes way up, and you have to transfer that balance to another card again, and pay yet another balance transfer fee,” Greg McBride adds.

Currently, interest rates on some of the most popular offers are 16.24%, 17.24%, or a variable rate, starting at 23.24%.

There are solutions for desperate causes, though

Under the new tax laws, the interest on Home Equity Lines of Credit will no longer be deductible, so if you can’t pay the balance right away, talk with your lender and require a fixed rate on the balance. If this is not possible, consider refinancing the line of credit balance and opt for a fixed rate home equity loan, with the shortest pay off period possible.