Rates on credit card debt expected to climb

Consumers who have large amounts of credit card debt may have been dismayed to hear that a downgrade in the U.S. credit rating would eventually lead to higher interest rates on consumer loans, and now that type of increase may be on the horizon.

Standard and Poor's recently announced that it would downgrade the credit rating for the U.S. to AA+ from AAA and now many experts believe others in the credit rating industry will follow suit, according to a report from TIME Magazine. Consequently, some experts predict that consumers who have variable-rate credit cards that are tied to the prime may end up seeing their APRs increase by as much as 2 or 3 percent in the next three to six months.

Such a change could have a major impact on consumers' holiday shopping plans, as they may be more likely to use those accounts to make a number of big-ticket purchases and then carry the balance from one month to the next. In addition, it may be a good idea to attempt to pay down as much of their existing balance as possible before the change takes effect to make debt management easier.