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The unprecedented pace of rates hikes continued this month after the Federal Reserve raised its short-term borrowing rate by 0.75 percentage point for the fourth time in a row. Now the target range is 3.75%-4%, the highest level since 2008.
There's still one meeting to go in 2022, which means we may potentially see another 0.75% rate hike. It is also possible that the Fed may slow down the pace a bit and increase the rate by half a point in December. Whichever the Fed's decision will be, one thing remains the same - interest rates will continue to climb up for now. For you, as a consumer and borrower, it means higher annual percentage rates (APRs) on credit accounts with variable interest rates.
Therefore, if you have credit cards, you will soon see higher APRs on your existing credit card accounts as most credit cards have variable rates. Thus, if you carry a balance on your credit cards, you will soon have to pay even more to cover the interest charges. And since we'll see more rate hikes, APRs are only going to continue to rise.
The best thing you can do now is pay off as much debt as you can. The 0% intro APR balance transfer credit cards are still widely available, especially for those with good and excellent credit. Balance transfer credit cards allow you to avoid interest on the transferred balance during the zero promotional period, which usually lasts for at least a year.
Another way to consolidate your debt and pay it off is with a lower interest personal loan. Personal loans would be a good option for consumers with bad credit who are struggling with their debt.