Thanks to the announcement by the Federal Reserve that interest rates are set to be kept low over the next few years, there are some commentators who feel that this can be beneficial for certain consumers, like those who may be looking into lines of credit that could range from a home loan, car loan, to credit cards, but when it comes to these low rates specifically on credit card opportunities, it could potentially open the chance for a cardholder to find more affordability on their overall debt repayment costs. However, questions as to whether this pledge to keep rates low will indeed impact cardholders remain for many consumers, as there are those who feel that interest rates on credit cards are not necessarily guaranteed to stay at a low level, while there are others who feel that conditions in the credit card market currently are more favorable in terms of keeping these potentially affordable rates for an extended period of time.
Yet, for consumers who are currently repaying debts on their credit card and may have an affordable rate, there are those who feel this is an optimal time to pay off these cards so that if credit card rates do again to increase, consumers will be able to find more affordability in the long run when it comes to paying off what they owe. Obviously, aspects of the CARD Act keep credit card issuers from suddenly increasing rates, which is helpful for consumers but in cases where men and women may miss payments, see their credit score decrease due to other factors in their financial life, or simply make mistakes when it comes to using their credit card, like acquiring too much debt, this can either cause rate increases or financial problems that could lead to the inability to pay off a credit card.
While there are still factors like unemployment to be considered as well, cardholders who are in a position where the interest rates they are paying on their homes are not excessive, and overall costs will not be as severe as they could be, there are still many proponents of getting out of debt as quickly as possible, especially when this debt is in the form of a credit card, whose interest rate may be higher than certain types of debts like a mortgage or a college loan.
It’s understandable that some consumers are in a position where they can only meet their minimum payment on their credit card debts, but there are those who are in a position where they can pay more than the minimum requirement, even if this means that they must sacrifice in other areas by saving, cutting out needless spending, and applying as much as they can towards these cards. While there are some consumers who feel that if interest rates stay low on average, they will be able to affordably use their credit cards over the next few years without any worry of rate increases, but even though there are requirements that credit card lenders give consumers advance notice on when their rate will increase, these current conditions do not mean that consumers will not see increases on credit card rates. As a result, consumers who pay off their credit cards and keep their debt levels low may stand to benefit more in their financial life if they keep their credit card debts at an affordable level and avoid carrying a balance when possible.