If you’re dealing with credit card debt, unpaid balances will continue to cost you more. The Federal Reserve is planning on continuing to raise rates this year to battle inflation. Furthermore, while credit card rates reached record highs in 2022, they are expected to go even higher this year. Most credit cards have variable interest rates tied to the Prime Rate. When the Prime Rate increases, as it does when the Fed raises rates, your credit card APR goes up as well. Here are 5 ways to avoid high-interest credit card debt.

1 Use a Spirit Financial Personal Access Line for unexpected purchases or to pay down credit card balances

The Spirit Financial Personal Access Line is an ideal way to avoid high-interest credit card debt or avoid using a credit card altogether. It enables you to take advantage of your credit line for unexpected emergencies or personal expenses. This unsecured line of credit for up to $35,000* will link directly to a borrower’s checking account. Tap to learn more about the benefits of the Personal Access Line.

2 Tackle credit card debt with a Personal Loan

When interest rates are on the rise, it’s smart to eliminate credit card debt by consolidating balances into a lower-rate personal loan. While you won’t avoid interest charges altogether, personal loan rates are often much lower than high-rate credit cards. They are also fixed, as compared to an adjustable-rate credit card. According to creditcards.com, the national average credit APR rose to an all-time high of 20.04 percent this month. Spirit Financial Personal Loan rates are much lower, making it a good option for paying off debt.

3 Tap into your home equity to avoid high-interest credit card debt

A Home Equity Line of Credit (HELOC) is another great option for paying off high-rate credit card debt. This revolving line of credit is secured by the equity in your home and provides a lower rate than high-rate credit cards. Spirit Financial is currently offering a HELOC limited-time introductory rate as low as 4.99% APR**. While most home equity loans come with high fees and closing costs, Spirit Financial’s HELOC has no annual fee and no closing costs.

4 Pay off credit card balances in full each month

Paying off your credit card balance in full each month can help you avoid paying interest and keep you out of debt. Most consumers can’t afford to pay off their balances each month, causing the balance to roll over and interest to build up. This is costly, not only with rising rates but also when you factor in compounding interest. Most credit card interest is compounded daily, meaning any interest accrued on what you owe immediately becomes part of your principal balance. You are basically paying interest on your interest. In addition to saving you money on daily compounding interest, paying off your credit card balances can also help you keep your credit utilization low, which is a positive for your credit score

5 Cut down on credit card purchases

Unless you have the ability to pay off your credit card balances in full each month, it’s a good idea to cut back on unnecessary credit card purchases. Adding to your balances with rates on the rise will just get you deeper in debt.

*APR = Annual Percentage Rate. Rates are for qualified borrowers and are based upon the creditworthiness of the individual. Actual rates may be different than the rates shown. Minimum APR is 11.75%, maximum APR is 18%. As of 12/15/22 the Prime Rate was 7.50%.

**APR= Annual Percentage Rate. Rates are for qualified borrowers and are based on the creditworthiness of the individual. Actual rates may be different than the rates shown. Minimum APR is 7.50%, maximum APR is 18%. As of 12/15/22 the Prime Rate was 7.50%. Introductory rate will be in effect for twelve (12) billing cycles from credit line open date. After the introductory discount period expires, the variable rate is subject to change monthly.