7 Ways to Manage Credit Card Debt When Rates Rise (2026)

After decades of low interest rates, the Federal Reserve hiked its key bank rate multiple times in 2022. The Fed’s actions were intended to slow US economic activity and tamp down rising rates of inflation. Consumers who used their credit cards to cope with higher prices now face the additional financial pinch of higher rates for their card debt.

According to the Fed’s data, the average annual percentage rate (APR) for US card accounts that were charged interest rose to 18% in the third quarter of 2022 and then spiked in the fourth quarter to 20%, an increase of about 4% in just one year.

The rate of inflation has slowed, but remains higher than the Fed wants it to be. That suggests prices and card APRs are likely to remain elevated for some time.

Consumers who pay their card balances in full every month may not notice higher APRs, but for those who carry over a balance, higher APRs can result in significantly higher monthly interest charges for the same level of debt.

Consumers who were caught unprepared may well wonder what they can do to minimize the financial pain. Here are seven ideas worth a look:

Even if you can’t afford to pay off all of your card debt, it’s worth the effort to try to make bigger payments each month. 

Always pay at least the minimum on every card you have to avoid penalties and fees. Then pay as much as you can toward whichever one of your cards has the biggest balance or highest APR. The more you reduce your card debt, the less you’ll be impacted by higher card rates.

If your savings are flush, you may want to redirect a portion of those funds to debt reduction. Just be careful not to deplete your reserves to the point where you won’t be able to respond financially to an emergency. Ideally, you should always have enough savings to manage a temporary job loss, unexpected car repairs, or medical bills.

Even when card rates are relatively high overall, some cards will charge you higher APRs than others. To shift your spending for new purchases to your cheaper cards, examine your monthly statements to find the APRs you’re currently paying. Then prioritize using the cards that charge you the least.

If you have more cards than you currently want to use, consider putting a freeze on the cards you’d prefer not to use at this time. Freezing a card won’t eliminate your minimum monthly payment or stop interest charges on your unpaid balance, but it will let you block any new spending on that card without closing your account and possibly hurting your credit score.

To freeze a card, look for this option on your card company’s website or mobile app. If you don’t see it, call your card company and ask. The phone number should be on the website and on the back of your card.

Negotiating your cards’ APRs isn’t easy, but sometimes, a phone call can result in a lower APR that could make your card debt more manageable.

For example, if you’re being charged a penalty APR because you missed a payment, your card company may be willing to lower your APR if you’re a loyal card customer with good or excellent credit and a modest balance. Credit card companies are often willing to hear what you have to say if you otherwise have a good history of on-time payments, and can explain why you missed the payment.

One phone call to customer service could end an extended period of higher interest charges.

Most card issuers offer multiple cards with different APRs. If you’re an established customer with a higher APR card, contact your card company and ask if you can convert your account to one with a lower APR. 

You’ll typically need good or excellent credit to qualify for the lowest APR cards, but your new APR doesn’t have to be the lowest available to still give you some relief. If you have a significant amount of card debt, APRs that are even slightly lower may help you better manage it or pay it off sooner.

If you’re offered a different card, be sure to ask whether it has an annual fee. If it does, consider the impact of that before you say yes. The fee alone could be higher than your interest savings.

Card companies can and often do change the terms of existing card accounts. Examples of terms that can be changed include credit limits and APRs. 

A federal law requires your card issuer to give you 45 days’ notice before increasing your APR for new purchases, except in certain situations. If you receive a notice, you may be able to decline or opt out of the revised terms. 

The opt-out option typically comes with a deadline. After that date, you won’t be able to decline the rate increase.

If you choose to opt out of your card’s new terms, your issuer will probably close your account. If that happens, your debt won’t disappear, you won’t be able to make new purchases with that card, and your credit score may be negatively impacted. But you will be allowed to pay off your current balance at your current rate, and the savings could be significant.

If you’re more than 60 days late with a payment, your card company can raise your rate for your current balance and for new purchases with no notice or opt-out opportunity. That’s another good reason to always make at least your minimum payment on time.

A balance transfer card may be the easiest, though not necessarily the cheapest, way to cope with higher APRs on your cards. In fact, with a good balance transfer card, your APR could drop to 0% for all or a portion of your card debt for as long as 18 months, sometimes even longer. That could give you an opportunity to pay off that debt at a lower cost.

There are some caveats:

• The 0% APR for a balance transfer is a temporary rate. When that rate expires, your new regular APR will be much higher.
• The 0% APR may apply only to your transferred balance and not to new purchases, even if you use that card.
• Balance transfers are usually capped, so you may not be able to transfer all the debt you have to a 0% balance transfer card.
• Balance transfers often involve fees, usually 2% to 5% of the amount transferred. These fees may cost more than the interest you would’ve paid without the balance transfer.
• You’ll need good or excellent credit to qualify for the top balance transfer cards.
• If you freeze a card account to stop new spending, you’ll need to unfreeze it before you can transfer all or part of your balance.

More credit may not sound like the best way to manage your existing debt, but if you have good or excellent credit, you may be able to qualify for new cards with lower APRs for purchases and balance transfers. 

Some cards offer a 0% APR for purchases for up to a year or longer after you open your account and a low regular APR after that promotion ends. Here are our favorites:

BankAmericard® credit card

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BankAmericard® credit card

4.6/5.0

About this rating

Our experts rate credit card offers based on factors like rewards, APRs, signup bonuses, fees, and approval rates, with a focus on benefits that provide the best value. We also consider cardholder needs such as credit-building potential, issuer reputation, and customer service. Our ratings are unbiased, updated regularly, and not influenced by issuers.

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★★★★★ 4.6/5.0

at Bank Of America’ssecure website

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• New! 0% Intro APR for 21 billing cycles for purchases, and for any balance transfers made in the first 60 days. After the Intro APR offer ends, a Variable APR that’s currently 14.99% – 25.99% will apply. A 5% fee applies to all balance transfers. Balance transfers may not be used to pay any account provided by Bank of America.
• No annual fee.
• No penalty APR. Paying late won’t automatically raise your interest rate (APR). Other account pricing and terms apply.
• This offer may not be available elsewhere if you leave this page. You can take advantage of this offer when you apply now.

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Intro (Purchases) 0% Intro APR for 21 billing cycles for purchases

Intro (Transfers) 0% Intro APR for 21 billing cycles for any balance transfers made in the first 60 days (Balance Transfer Fee 5% of the amount of each transaction)

Regular APR 14.99% – 25.99% Variable APR on purchases and balance transfers

Annual Fee $0

Credit Needed Excellent/Good

Bank of America® Customized Cash Rewards credit card

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Bank of America® Customized Cash Rewards credit card

4.9/5.0

About this rating

Our experts rate credit card offers based on factors like rewards, APRs, signup bonuses, fees, and approval rates, with a focus on benefits that provide the best value. We also consider cardholder needs such as credit-building potential, issuer reputation, and customer service. Our ratings are unbiased, updated regularly, and not influenced by issuers.

See Our Review»

Ashley Fricker Senior Editor

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★★★★★ 4.9/5.0

at Bank Of America’ssecure website

Our Review »

• $200 online cash rewards bonus after you make at least $1,000 in purchases in the first 90 days of account opening.
• Earn 6% cash back for the first year in the category of your choice. You’ll automatically earn 2% cash back at grocery stores and wholesale clubs, and unlimited 1% cash back on all other purchases. After the first year from account opening, you’ll earn 3% cash back on purchases in your choice category.
• Earn 6% and 2% cash back on the first $2,500 in combined purchases each quarter in the choice category, and at grocery stores and wholesale clubs, then earn unlimited 1% thereafter. After the 3% first-year bonus offer ends, you will earn 3% and 2% cash back on these purchases up to the quarterly maximum.
• No annual fee and cash rewards don’t expire as long as your account remains open.
• Select your card design option when you apply – the Customized Cash Rewards design, or the limited-time FIFA World Cup 2026™ design.
• 0% Intro APR for 15 billing cycles for purchases, and for any balance transfers made in the first 60 days. After the Intro APR offer ends, a Variable APR that’s currently 17.49% – 27.49% will apply. A 3% Intro balance transfer fee will apply for the first 60 days your account is open. After the Intro balance transfer fee offer ends, the fee for future balance transfers is 5%. Balance transfers may not be used to pay any account provided by Bank of America.
• This offer may not be available elsewhere if you leave this page. You can take advantage of this offer when you apply now.

Show MoreShow Less See application, terms and details »

Intro (Purchases) 0% Intro APR for 15 billing cycles for purchases

Intro (Transfers) 0% Intro APR for 15 billing cycles for any balance transfers made in the first 60 days (Balance Transfer Fee 3% for 60 days from account opening, then 5%)

Regular APR 17.49% – 27.49% Variable APR on purchases and balance transfers

Annual Fee $0

Credit Needed Excellent/Good

Citi Strata℠ Card

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Citi Strata℠ Card

4.8/5.0

About this rating

Our experts rate credit card offers based on factors like rewards, APRs, signup bonuses, fees, and approval rates, with a focus on benefits that provide the best value. We also consider cardholder needs such as credit-building potential, issuer reputation, and customer service. Our ratings are unbiased, updated regularly, and not influenced by issuers.

See Our Review»

Ashley Fricker Senior Editor

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★★★★★ 4.8/5.0

at the issuer’ssecure website

Our Review »

• Earn 20,000 bonus Points after spending $1,000 in the first 3 months of account opening.
• 0% Intro APR on balance transfers and purchases for 15 months; after that, the variable APR will be 18.49% – 28.49%, based on your creditworthiness. There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5).
• Earn 3 ThankYou® Points for each $1 spent in an eligible Self-Select Category of your choice (Fitness Clubs, Select Streaming Services, Live Entertainment, Cosmetic Stores/Barber Shops/Hair Salons, or Pet Supply Stores). Choose your eligible Self-Select Category on Citi Online or by calling customer service. The default Self-Select Category is Select Streaming Services.
• Earn 5 ThankYou® Points for each $1 spent on Hotels, Car Rentals and Attractions booked on Citi Travel® via cititravel.com; earn 3 ThankYou Points for each $1 spent at Supermarkets, on Select Transit purchases, and at Gas & EV Charging Stations.
• Earn 2 ThankYou® Points for each $1 spent at Restaurants; earn 1 ThankYou® Point for each $1 spent on All Other Purchases.
• No Annual Fee

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Intro (Purchases) 0% 15 months on Purchases

Intro (Transfers) 0% 15 months on Balance Transfers

Regular APR 18.49% – 28.49% (Variable)

Annual Fee $0

Credit Needed Good/Excellent

See Rates & Fees »

If you’re not able to qualify for a low or 0% APR card due to your credit history, improving your credit scores over time may make you a good candidate for more favorable credit opportunities in the future.

You can’t control rising prices or the Fed’s interest rate increases, but you can choose how to respond to higher APRs on your credit card debt.

If you receive a notice of a higher APR coming or you’re already struggling with high APRs, take a deep breath and try to calmly review your situation. Consider the pros and cons of each option, decide which makes sense for you, and then do it. One or two relatively easy changes could take the pressure off your financial situation.