The Federal Reserve Bank of New York says total household debt nationwide is more than $16 trillion.
LA CROSSE (WKBT) — Brandon Labeots, senior financial specialist, has worked at the University of Wisconsin Credit Union for more than 8 years.
He recommends that consumers facing high interest rates on their credit cards and high debt load speak to their bank or credit union to find out what options are available to them.
“For most people, we don’t know what’s available to us unless we ask,” he said.
On July 27, the Federal Reserve raised its key rate by 0.75%. The Federal Reserve’s decision to raise rates several times over the past two months has raised prime rates, which is impacting credit card rates and other financial stocks.
Prime rates are one of the measures banks use to determine interest rates on loans, according to Labeots.
To mitigate high credit card interest rates, Labeots said one option is to take out equity in a home or vehicle.
“When you take a dollar amount and move into something safe, generally speaking the interest rate is going to be a little bit lower and you can refinance those dollars,” he said.
Labeots also said consumers can perform a balance transfer to reduce credit card interest rates. This involves taking out another credit card with a lower interest rate to compensate for the card with a higher interest rate. Then consolidated payments are made to the card with the lowest rate.
“So you might be able to make 0% for, say, 18 months, paying a 3% fee instead of paying maybe a 20% credit card interest rate,” he said. declared. “It’s going to be a lot cheaper,” he added.
The problems Americans are facing over credit card debt come as the national debt has soared to more than $30.6 trillion.
Mike Klug has worked in financial services for over 42 years.
He said the rise in credit card interest rates, prompted by the Federal Reserve’s measures to curb inflation, is a symptom of an even sicker economy despite the 3.5% unemployment rate. .
“Our national debt, we will never be able to repay it,” he said. “We can never, ever pay off $30 trillion in debt,” he added.
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