5 Smart Ways To Manage High-Rate Debt Until the Fed Cuts Rates Again

Core Viewpoint - The Federal Reserve has decided to maintain the current benchmark interest rates, which will continue to impact borrowers facing high-interest debt, particularly credit cards and personal loans, delaying financial goals into 2026 [1] Group 1: Identifying and Managing High-Rate Debt - High-interest debt is defined as any debt with an annual percentage rate (APR) above 8%, including most credit cards and personal loans, and prioritizing these debts can lead to significant savings over time [2] - Utilizing established debt repayment strategies, such as the debt avalanche method or the debt snowball method, can effectively reduce total interest paid [3][4] Group 2: Debt Consolidation and Budget Management - Consolidating high-rate debt into a lower-rate personal loan or a balance transfer card with a 0% introductory APR can streamline payments and reduce interest temporarily [5] - Adjusting the monthly budget to eliminate discretionary spending or reallocating savings towards debt repayment can accelerate the process of paying down debt [6] Group 3: Payment Automation - Setting up automatic payments can help avoid late fees and protect credit scores, which is essential for securing better loan terms when interest rates eventually decrease [7]