Here’s some bad news for Arizona consumers who carry high credit card balances: Your credit card debt is about to get more expensive. In Arizona and every other state, credit card interest rates are based on consumer credit scores and the prime interest rate which is set by the Federal Reserve. The prime interest rate has recently been bumped up by a quarter percentage point. This may not seem like much of an increase, but a lot of Arizonians will see a significant change on their monthly credit card statements. Also, another quarter point rate hike is expected before the end of 2017. This means that, if possible, you should be paying down high credit card balances. It’s also a good time to improve your credit score in order to qualify for a credit card with a lower interest rate.
The Impact of Federal Reserve Interest Rate Hikes on Arizona Credit Card Debt
According to USA Today, average credit card interest rates are around 15.07% (with assigned rates for subprime consumers being substantially higher). If an Arizona consumer carries a balance of $5,000 on a card with a 15.7% APR, a quarter point prime rate hike will add about $175 in interest charges for the year. By the time 2019 rolls around, all of the planned prime rate hikes could take an additional $525 annually onto this Arizonians credit card debt.
ValuePenguin.com has published statistics showing that the average amount of credit card debt per household in Arizona was $5,673 in 2016. This means that a lot of consumers in the Grand Canyon State are likely to feel the impact of these prime interest rate hikes in a significant way. Of course, if you’re carrying $5,000 or more in credit card balances, you’re probably already paying way too much in interest charges. You may also be using more than 30% of your available credit, which can hurt your credit score.
If you haven’t already done so, now is a great time to ease up on credit card use and start paying down your existing balances. This will save you a lot of money and possibly give your credit score a boost by lowering your credit utilization rate. Speaking of your credit score, if yours is on the lower side, implementing a credit repair plan is the best way to raise your rating. A better credit score will help you qualify for a credit card that comes with a lower interest rate. By transferring your debt to a card with friendlier terms, you will offset the inevitable prime rate hikes.
The Fastest Way for Arizona Consumers to Increase their Credit Scores
In addition to paying down high credit card balances, you should check your credit reports for errors and have these inaccuracies removed. In Arizona, about 80% of consumer credit reports contain mistakes of some kind, and these errors might be hurting your credit score.
Regularly checking your credit reports is also a good way to watch for signs of identity theft. If a fraudster is able to steal your personal data, you may not know about the crime until fraudulent account activity has done damage to your credit score. The sooner you can take action against identity theft, the easier it will be to recover and salvage your credit score.
You are entitled to a free copy of your credit report from each of the major credit bureaus every 12 months. If you haven’t checked your credit reports in a while, you should go to www.annualcreditreport.com and request all three (TransUnion, Equifax, and Experian). You’ll notice that your credit reports are not identical, so there may be errors on one of them that don’t appear on the other two.
If you find inaccuracies on one or more of your credit reports, you should send dispute letters to the appropriate credit bureau(s) immediately. In order to successfully get inaccurate items removed, the disputing process has to be handled just right. This is why a lot of Arizonians seek legal assistance when they have to deal with the credit bureaus. Luckily, as an Arizona resident, you can get a FREE credit repair lawyer to help.
The Free and Legal way to Get Better Credit
Don’t let errors on your credit reports bring your credit score down. At Arizona Credit Lawyers, we’ve been cleaning up credit reports for consumers since 2008 for free. How do we do it? All of our fees come from the defendants in cases that are settled. This is why our clients pay nothing for the work we do.
Let’s start the conversation about what we can do for your credit. Set up your free consultation today by calling Attorney Gary Nitzkin at (248) 353-2882 or you can send an email through our Contact Us page.