Credit card interest rates are at 20% What a deal!
Black Friday season is under way. Here are some tips to avoid getting swallowed by debt.
ATLANTA, Ga. (Atlanta News First) - Holiday sales are on, but are you getting a deal if your credit card interest rate is 20 percent or more?
Credit card interest rates are at an all-time high, but it’s not stopping shoppers already taking advantage of early holiday deals.
The Black Friday event evolved into the Black Friday Season, and most sales started November 1. Macy’s website, for example, promotes “Black Friday Early Access,” but how much are shoppers saving if they charge gifts and let the balances carry over month after month?
Bankrate did a survey last month and found although 54 percent of holiday shoppers felt burdened for this year’s holidays, 53 percent still planned on using a credit card to buy gifts, even though credit card interest rates are averaging an all-time high of 20 percent.
None of this applies to shoppers who pay their balances in full every month, but many do not. The Consumer Financial Protection Bureau reports, “Consumers with revolving balances were charged more interest and fees than they earned in rewards.”
For consumers who can’t pay off their balances but still plan on shopping for the holidays, it’s wise to go online and check the card’s rate.
A zero-balance transfer credit card is one option for consumers with a decent credit score and can’t pay off their balance, but there are drawbacks.
Atlanta News First found a Wells Fargo balance transfer card offering a zero-interest balance for up to 21 months, but many overlook the 5 percent balance transfer fee.
Personal loans are another option that could cut a credit card’s interest rate by 50 percent.
Apple Pay’s Apple Pay Later allows approved customers to make four equal payments over six weeks, and After Pay offers similar terms, although there are penalties and interest on both if consumers don’t pay on time.
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