Why you should care about rising interest rates

You probably don't pay much attention when a quarter-point hike in rates occurs – a quarter of a percent is barely felt by the average credit card user – but you should. Interest rates directly affect how much it costs you to borrow money.

Reassess your debt

Your goal will be to reduce what you are paying in interest. Start with the following:

1. Look for a card with a lower interest rate

   • The higher the interest rate, the more you it will cost you to carry a balance on your card. It’s always best to go with a card that has a lower interest rate, but watch out for fees and penalties.

2. Look for a card without a penalty APR

   • The penalty rate is the rate you’ll pay on your card if you fail to make on-time payments or you miss a payment. It is usually significantly higher than the initial rate offered on your card. There are credit cards on the market that don’t have penalty rates, including a Visa card from Oregon State Credit Union.

3. Look for a card with no balance transfer fee

   • Once you find a card with a lower rate and no penalty fee, you’ll want to transfer your existing balances onto it to maximize your savings. Beware of balance transfer fees which are typically 3 percent of the balance being transferred. Depending on how much you’re transferring, that can be a significant amount. The Visa Value card from Oregon State Credit Union has competitive rates and no balance transfer fees.

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