What Does the Mortgage Industry Have to Do With Your Credit Card Rate?

What's Happening?

That low interest rate you're currently paying on your credit card? It might soon be a thing of the past. As many financial institutions are looking for ways to survive in the current economy, they seem to be sticking it to their credit card customers.

See, the shady mortgage lenders that were making bad deals in recent years created somewhat of an avalanche effect in the financial sector. The current housing market, however, prevents the financial institutions from recouping their losses through mortgage loans. Hence, the federal aid many lenders have recently received.

Now why would banks that have received millions of dollars in aid raise credit card interest rates? It's all about profit, and there's nothing you can do about it. It's somewhat akin to robbing Peter to pay Paul. Unfortunately, you're Peter.

The Outlook

If you're hoping credit card rates will take another dive, don't hold your breath. My advice? Pay your credit card debt off as quickly as possible. Tighten that budget and cut out the fat. Put all of your extra cash towards paying down debt rather than dinner out or that new purse on sale at Macy's.

In fact, this is one of the rare times that I might advise looking into a home equity loan to pay off high-interest debts if no other options are available to you. However, this is something you should only investigate once all your other options have been explored.

You CAN pay down your credit card debt. There is lots of advice here to help you. I have faith in you.