SAN DIEGO (KGTV) -- As the trade war continues to cause uncertainty in the economy, experts are urging consumers to exercise caution when using credit cards.
Financial experts warn that now is not the ideal time to seek better interest rates.
David Ely, a professor of finance at San Diego State University, comments on the unpredictable nature of the current financial landscape.
"It is a very unstable time here, so, I think that what financial institutions do, in terms of the terms of their credit card, is very unpredictable at this point," Ely stated.
Even with scheduled meetings this week by the Federal Reserve to discuss interest rates, the impact of tariffs on the economy remains uncertain.
"We're at a point here where because of the tariffs, it's unclear whether we're more exposed to inflation or a slowdown in the economy," Ely explained.
Given these challenges, Ely recommends that consumers prioritize paying off existing credit card balances instead of searching for better deals.
According to the latest data from TransUnion, the average credit card debt per person in February was $6,455, an increase of nearly $200 from the previous year.
In addition to timely bill payments, Ely emphasizes the importance of budgeting. He believes effective budgeting can help consumers pay off debt and may lead to a higher credit card limit, which can be beneficial for those considering balance transfers to cards with an interest-free period, thus reducing interest costs.
Ely advises, "So if you look at your balance relative to the limit of your credit card, if that's 30% or below, then that's a good thing that would tend to improve your credit score."
He also highlights the value of proper research on credit card companies, enabling consumers to make informed choices when the time is right.
"And if you believe that interest rates might be falling a little bit more over the year, maybe that's the time to jump in and begin to look for balance transfers and a way to maybe find a card with better terms," he added.
As economic conditions evolve, consumers are encouraged to stay informed and practice financial prudence
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