Americans with credit card debt will not get much help from Federal Reserve interest rate cuts.
The Fed is expected to cut interest rates by a quarter-percentage point to 1.75 to 2 percent After its two-day meeting on Wednesday – but it will not shave much of credit card bills, experts say.
"Embossed credit card issuers are not huge in the Fed, it's not something most people will want to do with this single rate reduction," said Matt Schulz, Comparatives.com chief industry analyst, FOX Business. "In terms of reducing your actual monthly bill, you're talking about just a few dollars a month for most people."
Average household credit card debt is $ 5,700, according to the Fed, and the last rate cut lowered the minimum payment just $ 1
You can now do the following to help manage credit card debt:
Consider an Account Transfer Card
Account transfer cards allow users to take a high yield debt from one or more credit cards and move them to another card with a lower interest rate. This means that cardholders can make more payments on the principal amount each month instead of charging interest, which helps reduce some credit card debt faster.
"It can seem contradictory to settle credit card debts with another credit card, but using these zero zero percent transfer cards can save you a lot of interest. You speak of one and a half years without interest, "advised Schulz.
The rate cuts by the US Federal Reserve will not bring great relief to the Americans.
Cards like Chase Slate, American Express Everyday or BankAmericard offer 15 months with no interest and no transfer fee.
However, some experts fear that more interest rate cuts could lead to credit card issuers being less generous with zero-interest-rate periods or introducing higher transfer fees.
"Currently 87 percent of the credit transfer cards charge a transfer fee typically between 3 percent and 5 percent. Falling interest rates could also encourage issuers to charge other fees, such as: For example, fees for overseas transactions and annual fees, "said Ted Rossman, an industry analyst.
Lower your annual percentage.
The average annual credit card percentage is between 17 and 24 percent. Industry experts recommend that you ask your credit card company to lower the APR.
"People have more power over the credit card issuer than they believe, but far too few people actually use it. If you have a good credit rating, a good track record, and a willingness to pick up the phone, there's a good chance you can lower your APR more, "Schulz said.
It is also possible to negotiate terms of payment and request a lower minimum payment. Those who are long-term customers who make on-time payments will take a better position in negotiations.
CLICK HERE TO READ MORE ABOUT FOX BUSINESS For FICO, the highest score in the history of credit scoring, most are likely to qualify for a lower interest rate.
Automating payments is an easy way to make sure you're making timely payments to avoid late fees and good credit. It is recommended to pay more than the minimum as banks deduct interest with each payment period.