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:

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.

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.

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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