Lowering credit card debt vital as rates rise

Updated: Sep 1, 2022 / 09:33 AM CDT

Mortgage Calculator

This calculator helps you estimate your monthly mortgage payment. It adds up the loan payment (principal + interest), property tax, and insurance. The loan payment is spread out over the years of your loan term.

Loan Amount ($):

This is the total amount you're borrowing from the bank.

Annual Interest Rate (%):

This is the yearly interest rate on your loan.

Loan Term (years):

This is how long you'll take to repay the loan.

Annual Property Tax ($):

This is the yearly tax you pay on your property.

Annual Homeowners Insurance ($):

This is the yearly cost to insure your home.

Monthly Payment Breakdown

Principal and Interest: $

Property Tax: $

Homeowners Insurance: $

Total Estimated Monthly Payment: $

(NewsNation) — The Federal Reserve has raised interest rates four times this year — the current rate sits between 2.25%-2.5%, and some experts predict consumers could see it rise as high as 4% by 2023.

Given the cost of everything else right now, including skyrocketing rent and elevated gas prices, the average cardholder has close to $6,000 in credit card debt, according to moneygeek.com.

Dan Roccato, a clinical finance professor at the University of San Diego, said if consumers have variable debt, make credit cards the priority and pay them off first.

“If you’ve got decent credit, you can still get one of these 0% cards — transfer your balance over, watch out for fees, and that way you’re paying for, let’s say six or 12 months, just principal, you’re paying it down faster,” Roccato recommended.

He also recommends paying off cards with higher interest rates first.

Also, if consumers are in need of taking a loan out right now, he suggests doing a fixed loan and staying away from variable loans and adjustable home equity lines of credit.