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As credit card debt rises and interest rates rise, many spenders fear high balances.
Almost 1 in 5 Americans are afraid to check their credit card statements, a . According to recent report From travel website Upgraded Points, which surveyed 3,500 people in April 2022.
Actually, credit card balance jumped $71 billion Year over year, up from $841 billion during the first quarter of 2022, the Federal Reserve Bank of New York reported.
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This week, the central bank is expected to raise its benchmark rate by three-quarters of a percentage point, sending higher credit card interest rates,
According to CreditCards.com, the average credit card interest rate stood at 17.46% as of July 20, and could reach a record high of 19% by the end of the year.
And many Americans are turning to plastic for their travels. According to the UpgradedPoints report, vacations are the top credit card spend in 17 states.
The survey showed that other popular purchases were computers, furniture, motor vehicle expenses and TVs.
However, the same report found that more than a third of respondents used credit to buy something they couldn’t afford but didn’t want to wait.
“Instant gratification has become more accessible than ever,” said certified financial planner Cecil Staten, president of Arc Financial Planning and Wealth Advisors in Athens, Georgia.
Consumers have more ways to finance purchases, but high-interest credit card debt may be the hardest to pay off, he said.
With many Americans struggling, it’s easy to see why some may avoid credit card statements, said Matt Schulz, chief credit analyst at LendingTree. However, it is an important budgeting tool and How to protect yourself from fraudThey said.
“With extreme inflation and rising interest rates, it’s even more important to check your card statements regularly,” Schultz said.
If you’re wrestling with a high credit card balance, you can try calling your issuer asking for a lower interest rate. “It works out more often than you imagine,” he said.
They suggested that you may also qualify for a 0% interest balance transfer offer, which lets you transfer the balance to another credit card with a 0% promotional rate for a limited period of time. And low-interest personal loans may also be worth exploring.
“These steps can help and motivate you to feel a little more empowered, but you have to take the first step,” he said.