Tis the Season to Pay off Credit Card Debt
Alese Underwood/Time Warner Cable News (San Antonio)
29 December 2016
Paying off all that credit card debt from the holidays might be a little harder than you think in 2017. Our Alese Underwood shows us how an interest rate hike could damage your credit score if you're not careful.
SAN ANTONIO -- As holiday spending winds down, tis' the season to pay off your credit cards, but it might cost you a little extra in 2017.
"The average American has about nine credit cards in their wallet at any given time," said Federico Pena with GreenPath Financial Wellness.
"It's very easy and very convenient for us to swipe our credit cards, especially if you're buying online it gives you that added protection," said Better Business Bureau Regional Director Miguel Segura.
The latest study by WalletHub suggests the Federal Reserve will issue additional interest rate hikes in the new year.
"As this financial trend keeps going up interest rates on credit cards, houses, and things are going to go up as well," said Pena.
Experts estimate the cost to consumers will be $2.8 billion in higher interest rates.
"Even the smallest interest rate increase can definitely impact the long term debt that you're going to have to be paying off," said Segura.
Financial experts also say try to use cash.
To help keep your credit score in line, financial planners say you should make a budget, cut extra expenses like eating at restaurants, and always pay more than the minimal amount due every month.
"It might be a little bit hard to get rid of things like that but you want to attack your debt as aggressively as possible," said Pena.
"Contact your creditor if you're having a hard time paying your accounts. Let them know the situation and try to work a different or modified payment plan," said Segura.
"Not using your credit card while you're trying to pay it down is actually the best thing you can do," said Pena.
"It can be very tempting for you as you start paying off that balance and that debt to start using your credit card a little more freely, but just think about the long term. Monitor your credit reports, monitor your credit scores, and that will help you keep motivated to keep paying off that debt," said Segura.
The Better Business Bureau says the holidays are also prime time for identity theft.
Be wary of unsolicited emails and pop-ups, never give out your credit card number to check your credit score online, and check your bank statement frequently.
In 2016 the BBB received more than 750 complaints against credit repair services nationwide.
To watch the interview with GreenPath and the BBB of San Antonio, click here.