Amid persistent inflation, Americans are struggling under the weight of the current economic climate. Prices are rising across the board, from the grocery store to car insurance. Compounding the problem are high interest rates that are causing the cost of borrowing to skyrocket. For example, since 2021, the average credit card interest rate has soared from 16.45% to 22.63%, according to the most recent Federal Reserve data.
'You may be able to get away with minimum payments while your credit balance continues to grow, but it could eventually lead to late or missing payments. 'Late payments and high balances can cause significant damage to your credit score, which makes it more difficult to get approved for credit in the future,' says Tayne. 'And if you are approved, you'll be more likely to pay high interest rates.