A ‘double whammy': Consumers are feeling the pain of rising interest rates and ballooning credit card debt, economist says

A 'double whammy': Consumers are feeling the pain of rising interest rates and ballooning credit card debt, economist says  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  VIEW IN BROWSER | SUBSCRIBE WED, JUL 20, 2022 YOUR WEALTH Editor's Note Credit cards can be a great financial tool – unless, that is, you can't make the monthly payments. Then they can become your worst financial nightmare. Sadly, more and more American consumers are putting a great deal more stuff on their credit cards. This is because they need to keep up with the rising costs of everyday goods and services. Of course, carrying long-term credit card debt is generally a bad idea. It's always better to pay your credit card bill in full rather than carrying a balance. After all, credit card debt is typically the most expensive debt you can take on. Interest rates on credit cards are typically well into the double-digits and often above 20% — even for people with good credit. For many people, it's just not possible to make those monthly credit card payments. Consequently, they find themselves always behind and in debt. Well, if you need an incentive to make a plan to pay down that debt, here goes: As the Federal Reserve continues to raise interest rates to fight inflation, carrying a credit card balance month after month costs more than it has in many years. Why? Because the interest rate will tick-up in concert with the Fed. Interest rate hikes from the Fed will result in higher annual percentage rates and longer debt payoff periods for cardholders. For those dealing with higher credit card balances to start, the challenge to pay them off will only intensify. Put simply: When the Fed raises interest rates, your credit card debt becomes even more expensive. Finding ways to pay down credit card debt can be complicated. Successfully paying off your credit card debt requires a hands-on approach, from determining your best payment strategy to contacting creditors to negotiate rates. It is, of course, in your best interest to take the necessary steps to pay down your credit card balance and save yourself some money. Now is a good time to get started. For more cool stuff like this, be sure to visit CNBC's Financial Advisor Hub and Personal Finance section. Jim Pavia Money Editor @JIMPAVIA A 'double whammy': Consumers are feeling the pain of rising interest rates and ballooning credit card debt, economist says Consumers are now paying higher prices for everyday expenses and coughing up more in interest on their credit cards. Investors have put $43 billion in dividend-paying funds this year. Before you 'chase dividends,' here's what to know With increased fears of a possible recession, investors seeking steady income may turn to stocks paying quarterly dividends. Here's what to know before buying. How soaring inflation may deliver a higher tax bill — especially for retirees, homeowners and high earners As the cost of living surges, Americans wrestle with higher prices on day-to-day costs. But higher taxes can be a sneaky added expense, especially for retirees. Airlines are struggling with lost and delayed bags: What to know and how to pack if you're traveling this summer Airlines' hassles seem to be growing, and that might mean a lost or delayed bag this summer. Here's what travelers should know about their financial recourse. A wake-up call: Your financial plan can help 'stress test' your retirement strategy through inflation, market downturn A recent survey found only 29% of Americans have a financial plan, even though having one could help them "stress test" their finances amid economic woes. Student loan borrowers pursuing federal public service forgiveness are getting a new servicer. What to know The government is matching borrowers pursuing public student loan forgiveness with a new servicer soon. Here's what they need to know. 75% of middle-class households say their income is falling behind the cost of living The outlook among middle-income families has also declined: 39% are expecting to be worse off financially in a year, compared with 17% in December 2020. 4 strategies that can help you avoid paying extra every month for Medicare premiums While most Medicare enrollees pay the standard premium amounts for Part B (outpatient care) and Part D (prescription drugs), some pay more due to higher income. Investors want to 'minimize uncertainty,' says behavioral finance expert, but 3 strategies can help them adapt quickly The first half of this year ushered in market tumult, hot inflation and rising interest rates. Here's how to prepare for what the rest of 2022 may bring. FBI says fake crypto apps defrauded investors of more than $42 million The FBI warned that cybercriminals are capitalizing on the growing interest in crypto investing to attract investors to fraudulent apps. CONTRIBUTORS Sharon Epperson @sharon_epperson Josh Brown @ReformedBroker Unsubscribe Manage Newsletters Terms of Service Join the CNBC Panel   Digital Products Feedback Privacy Policy CNBC Events   © 2022 CNBC LLC. All rights reserved. A property of NBCUniversal. 900 Sylvan Avenue, Englewood Cliffs, NJ 07632 Data is a real-time snapshot *Data is delayed at least 15 minutes. Global Business and Financial News, Stock Quotes and Market Data and Analysis. Data also provided by THOMSON REUTERS