Interest rates are rising – how older Americans should handle their credit

Rising interest rates may be nice for boosting savings accounts, but they’re unkind to credit card balances – older Americans, especially those on a fixed budget, should beware. 

Retirement Tip of the Week: Think carefully before making any charges to a credit card, and try to pay off any consumer debt as quickly as you can. 

Consumer debt is undesirable for any individual, but especially those on a fixed budget in retirement. 

Credit card debt in particular often comes with higher variable interest rates, so in an economic environment like the one we’re currently in, Americans may want to prioritize paying down those debts as quickly as possible. 

One way to do that is a simple analysis of the money coming in and out every month, cutting expenses wherever reasonably possible, and allocating a higher portion to credit card balances.

Another is to look into a credit card with a promotional 0% interest rate – though with these, individuals must remain on a strict schedule and ensure they can pay the balance off before the promotion ends, such as after a year or 18 months depending on the terms. After that period ends, the interest rate spikes.

Consumers can also reach out to their credit card company, or a credit counselor, to learn more about debt repayment plans.