The new year is here, and it’s traditionally a time for new beginnings. You probably have a lot of exciting or anxiety-inducing things, whether your New Year’s resolutions include using up your gym membership or reaching career goals.

The credit cards in your wallet are probably not the first thing on your mind. However, credit card trends in 2022 can have a big impact on your financial health. What you do (or don’t do) with your credit cards in the New Year can make a significant difference to your budget, and even your lifestyle.

Don’t worry, I’m not about to send you on a research mission to find out what 2022 holds for credit cards. Read on to find out what to expect from the card landscape and how to prepare your portfolio.

What to know about credit cards in 2022

Your credit card debt may get more expensive

According to a new Bankrate survey, 53% of Gen Z (16-25) and 41% of Millennials (26-41) who have credit card debt don’t know their interest rates.

To be honest, I don’t know the APRs of my cards either, but I don’t have a balance either. I avoid them at all costs.

Credit card debt is incredibly expensive and about to get even more expensive thanks to the Federal Reserve, which is expected to start raising its target interest rate by the spring.

When the Fed raises interest rates, credit card rates also begin to rise.

“If the Fed’s median projection is correct and the fed funds rate increases 75 basis points this year, that would take the average credit card rate from 16.13% today to around 16.88%” , says Ted Rossman, senior industry analyst at Bankrate.

As a result, the credit card debt you carry will also become more expensive.

Rossman offers the following example: “At 16.13%, a person making minimum payments for the average credit card debt ($5,525, according to Experian) would be in debt for 194 months (just over 16 years) and would pay $6,160 in interest Minimum payments would start at around $130 and decrease with the balance At 16.88%, it would take 196 months and $6,472 in interest (an increase of $312). would start at around $133.

As you can see, making minimum payments can keep you in debt longer, especially if rates continue to rise. The best solution is to make paying off credit card debt a priority.

Review your budget and see where you can cut spending to pay off your cards faster. Rossman also suggests nonprofit credit counseling, taking a side hustle or selling unnecessary goods to raise cash.

It may become more difficult to pay off your cards if you have student loans

During the coronavirus pandemic, student loan repayments have been suspended, which has relieved many budgets.

If this applies to you, you may have further reduced your card debt because your budget left more room for credit card bills.

This, however, may soon change.

“The student loan forbearance period is currently set to expire on May 1, 2022,” says Hanneh Bareham, student loan expert at Bankrate. “Borrowers who took advantage of the federal relief period will need to review their monthly federal student loan repayments and interest rates against their other debts. While borrowers should prioritize high-interest debt, such as credit card debt, it’s also crucial that they make at least the minimum payments on all low-interest debt, including including their student loans.

Having to make that monthly student loan payment again could reduce your ability to pay other debts, Bareham says. For this reason, it is best to research the rebate options and benefits the government offers federal borrowers.

“There are different repayment plans offered, such as income-based repayment plans, which can make the monthly amount more manageable,” suggests Bareham. “There are also federal remission programs, such as the Public Service Loan Remission (PSLF), which forgives the remaining federal student loan balance for eligible public servants after 120 on-time payments.”

Whether or not you decide to take advantage of the discount options, it’s best to try to pay off your credit card balances before May to avoid overloading your budget with multiple types of debt.

If that’s not enough time to pay off your balances, don’t worry. There may be another way to avoid credit card interest.

A balance transfer card can help

A balance transfer credit card allows you to move balances from your other cards for a fee (usually 3-5%) and pay no interest for the duration of an introductory period.

In 2020, these cards have become scarce as credit card issuers have tightened underwriting for many card products.

In 2021, however, the credit card market was booming and balance transfer cards made a comeback. They’ve come back strong, with some cards offering up to 21 months interest-free.

To see how this works in practice, let’s go back to our $5,525 debt example.

“In this scenario, you could make 21 equal payments of about $263 to eliminate that $5,525 debt without paying interest,” says Rossman.

This strategy can save you thousands of dollars in interest and years of worrying about credit card payments, especially compared to only making minimum payments on your existing card.

Keep in mind that even though balance transfer cards are once again available, it’s best to make sure your credit score is in good shape before applying. Balance transfer cards generally require good or excellent credit.

You may miss something if you don’t look for a new map

Without a doubt, if you have a balance, it’s wise to focus on paying it off. There’s no point in earning credit card rewards if you pay more interest than you earn in points or cash back.

However, if you have no credit card debt and haven’t applied for a new card in a while, you may be missing out.

The recent survey I mentioned found that 28% of Gen Z and 27% of Gen Y have never switched credit cards or have always used the same one.

Being complacent in your credit card strategy isn’t necessarily bad. You know it works for you and there is nothing wrong with it. It’s understandable that not everyone wants to spend time staying on top of credit card offers all the time.

That said, you’re also leaving money on the table by doing this, possibly hundreds or even thousands of dollars.

If you want to upgrade your credit card game, 2022 is the year to do it.

In 2021, some of the best credit cards received upgrades that made them even more desirable. More and more credit card offers have entered the market, some of them shaking up the industry.

More and more credit cards for consumers with bad or no credit have started offering rewards. Balance transfer introductory periods have become longer. News on the premium travel card front has signaled that these cards are becoming more accessible.

With all of these exciting developments, I was able to earn over $3,000 in cash back, statement credits, and travel with my credit cards in 2021.

You can do it too, and you can probably do even better this year if you take the time to compare credit card offers and develop spending strategies. I expect the credit card market to continue to evolve this year, making offers even more attractive and accessible to more consumers.

Of course, the process of selecting the right card can be a bit overwhelming. If you’re not sure where to start, take a look at the winners of the Bankrate Awards 2022. Using a rigorous scoring system, our experts reviewed over 250 of the best cards to share with you the cream credit card cream.

The bottom line

Credit cards may not be a priority as you head into the new year. Still, not being aware of what’s going on with credit card rates and the market itself can impact your wallet, whether your debt gets more expensive, your budget needs to be adjusted, or you run out. savings and potential rewards.

Remember that one way or another, credit cards are probably part of your financial well-being. Why not make a resolution to keep your credit card strategy healthy this year?