Actor Hill Harper said it perfectly: “Credit card interest payments are the dumbest money of all.” This year wasn’t kind to credit cardholders’ wallets. In 2019, cardholders paid an average of 17% APR – the highest level recorded by the Federal Reserve since 1994. To put it into perspective: in 2009, the average APR registered just under 13% and in 2016 it hovered around 12.5%.
(See chart below)
Even the maximum APR has climbed significantly. Financial institutions typically over a wide range of APRs. As a result of the increase, maximum APRs are around 25% with the media standing at 21%.
So, what does this mean for you?
Well, it means you’re likely paying more in interest than you’ve ever paid. But, don’t worry. There are several ways around paying high interest rates that will actually help you in the long run.
If you’re thinking about signing up for a credit card, do your research. First of all, know your credit score. That’s going to be a huge factor in determining your APR. Also, consider why you want a credit card. Are you looking for cash back options? Do you want to earn points or airline miles? Don’t wander and apply aimlessly. Look at the specific types of cards that are designed for the purpose you want and see which card best suits your needs.
Obtaining and maintaining credit by using credit cards doesn’t have to be a scary experience. Have you talked to someone at Maple Federal Credit Union? We have a credit card that could suit your needs.
Before you go with a big box bank, talk to us and see how we can help. Stop by a branch or call us today.
Click the link above to continue or CANCEL