Thrifty Thinking: How to Pay Off Holiday Debt as Interest Rates Rise Again

With the Federal Reserve raising rates for the fourth time this year, holiday shoppers who took on extra debt this season will need to act quickly.

“Credit card companies will be quick to increase their own rates in response to the latest Fed hike,” stated Brittney Mayer, credit strategist at CardRates.com. “Cardholders should work to pay off their holiday debt as soon as possible to minimize the cost of yet another interest rate hike."

Four Smart Tips for Consumers Paying Off Holiday Debt:

1. If possible, pay the balance in full before the due date to avoid interest fees entirely.
2. Consider a 0% APR balance transfer offer to get a break on interest for at least six months; note that good credit is typically required for these offers and most cards will charge a balance transfer fee.
3. Make more than the minimum required payment each month; this shortens the time to pay off the debt and reduces the amount of total interest paid
4. If nothing else, always make at least the minimum required payment to avoid late fees -- and yes, one day late is still late.