Today’s high interest rate environment can make credit card debt expensive. With the federal funds rate frozen at a 23-year high, interest rates on credit cards and other debts are elevated. But, that could change soon. 

The inflation report for June showed that price growth is continuing to cool in the United States. And, there’s a clear correlation between inflation and interest rates. When price growth slows, stagnates or falls, it gives the Federal Reserve cause to reduce its federal funds rate, which typically impacts consumer interest rates. 

And since credit card debt usually comes with variable rates, you may wonder whether the new inflation report means interest rates on credit cards will fall, thus cutting the cost of carrying a balance. That’s what we will detail below.

Do you have high interest credit card debt? Get the relief you need here now.

Will credit card debt become less expensive with inflation cooling?

Considering the relationship between inflation and interest rates, it’s possible that credit card interest rates could fall soon, making credit card debt less expensive. But if you’re struggling to keep up with your credit card payments and hoping for a substantial rate cut, you may be waiting for some time. That’s because changes to interest rates tend to happen slowly. 

Among other things, the Federal Reserve is charged with tempering inflation. And it typically does so by changing interest rates; increasing them when inflation is too high and decreasing them when inflation is too low. But, if the Fed acts too quickly, its interest rate changes can harm the economy. 

To put the speed of rate reductions into perspective, the Fed has already announced that it only expects to cut rates once this year. And when it does, its federal fund rate is only expected to drop by 0.25%. That relatively minimal drop will do little to reduce credit card minimum payments. So, if you need debt relief now, waiting for it to come by way of rate cuts may be a bad idea. 

Don’t wait for lower rates to get the relief you need now. 

How to get debt relief now

If you need relief from high interest credit card debt, follow these steps: 

1. Understand your debts and your budget: Look into your credit card accounts to determine how much debt you have, your average interest rate and how much your monthly payments add up to. And, think about how much you can comfortably afford to pay toward your debt monthly. 
2. Choose a debt relief option: There are several debt relief options to choose from. Three of the most common are debt consolidation, debt management and credit card debt forgiveness. Each of these services provides a different level of relief and is designed for debtors in varying situations. So, it’s important to determine which option is best for you. 
3. Compare providers: There are many debt relief companies to choose from. Each has its own pricing structure and strategy for managing your debts. So, compare leading providers to find one that can meet your needs. 
4. Get started: Contact the debt relief provider you believe will be best. When you do, be honest. Keep in mind that debt relief providers can only help if they understand your financial hardship and capabilities. 
5. Stick to the plan: Once you sign up for a debt relief solution, make your monthly payments as agreed. As long as you stick to the plan, you should enjoy the relief you need. 

The bottom line

With Thursday’s inflation report showing cooling price growth, credit card interest rates could start to come down soon. But, those interest rate reductions may not be enough to ease your financial hardship if you’re having trouble keeping up with your payments. Instead, consider seeking debt relief via consolidation, management or forgiveness. But, compare your options when you do as some types of debt relief may be better for your situation than others. Learn more about your options by talking to a debt relief professional now.