Holiday credit-card bills are rising, and borrowers should prepare for higher costs in the new year.
The government may have lost a month of inflation data, but cardholders should not expect their annual percentage rates to fall as a result.
Most credit cards carry variable APRs tied to the prime rate, which follows Federal Reserve policy decisions.
When the Fed raises its benchmark rate, card issuers typically pass the increase on to consumers within one or two billing cycles.
Holiday spending makes the impact worse. Balances carried from December can compound quickly once higher rates apply.
Consumers can ease the pressure by paying more than the minimum and targeting the highest-rate balances first.
Balance-transfer offers and lower-rate personal loans may help some borrowers, but fees and credit-score requirements vary.
Calling the issuer to request a lower rate remains a simple option, though approval is not guaranteed.
Planning a payoff schedule before statements arrive gives borrowers more control over interest charges.
