Holiday Card Bills Are Rising, and a Lost Inflation Report Won't Lower Your APR

Holiday spending always strains household budgets, and many shoppers are only now seeing the total. Balances built up over November and December carry into January, and any amount not paid in full starts accruing interest at the card's annual percentage rate, or APR.

A report says the government may have lost a month of inflation data. It is an odd item to read next to a credit card statement, but it is unlikely to change what you pay. Most card APRs are variable and tied to the prime rate, which moves when the Federal Reserve changes its benchmark rate. One missing monthly inflation reading does not directly move that benchmark, so cardholders should not expect their rate to fall because of the data gap.

That makes the practical steps more important. Start by checking your latest statement for the current APR, your balance and the minimum payment. Paying only the minimum keeps the account in good standing but can stretch repayment for years, so pay as much above that as your budget allows, even if it is a modest extra amount each month.

Next, call your issuer and ask for a lower rate. Cardholders with a steady payment history sometimes get a reduction when they ask, though there is no guarantee. If your credit is strong, a balance transfer card with an introductory 0% period can also help, but compare the transfer fee, which is often a few percent of the amount moved, and note when the promotional rate ends. A fixed-rate personal loan is another option to weigh against high-APR card debt.

Finally, write down every card balance, its rate and its due date. Pay the minimum on each account, then direct any extra money to the card with the highest APR. Keep new holiday purchases off the cards you are paying down until the balance is under control. The bill may be unwelcome in January, but a clear plan can keep it from growing into a much larger problem by spring.