The new year is here, and it’s traditionally time for new beginnings. You probably have many exciting or anxiety-inducing things going on, whether your New Year’s resolutions include using your gym membership or hitting career goals.

The credit cards in your wallet are probably far from the first thing on your mind. However, 2023 credit card trends may have a great 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 in your budget — and even your lifestyle.

Here’s what to expect from the card landscape and how to prepare your wallet.

Your credit card debt may become more expensive

According to a Bankrate survey, 53 percent of Gen-Z (16 to 25 years old) and 41 percent of millennials (26 to 41 years old) who carry credit card debt don’t know their interest rates.

Credit card debt is incredibly expensive and this past year, it’s become even pricier thanks to the Federal Reserve, which hiked interest rates several times. Prepare for your credit card APRs to rise even higher in 2023.

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

“We have been tracking credit card rates since 1985, and they rose more in 2022 than any other year on record,” says Ted Rossman, senior industry analyst at Bankrate. “The national average was 16.3 percent at the start of last year, and it finished the year at a record-high 19.6 percent. We’re anticipating further increases this year which could bring the average to somewhere between 20 and 20.5 percent by the middle of 2023.”

As a result, the credit card debt you carry has become much more expensive.

Rossman offers the following example: “At 16.3 percent, someone making minimum payments toward the average credit card debt ($5,474, according to TransUnion) would be in debt for 194 months (a little over 16 years) and would pay $6,161 in interest. The minimum payments would start at $129 and decline along with the balance. At 19.6 percent, it takes 201 months and $7,532 in interest (an increase of $1,371). The minimum payments start at $144.”

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 credit card debt repayment a priority.

Revise your budget and see where you can cut expenses to pay off your cards faster. Rossman also suggests nonprofit credit counseling, taking on a side hustle or selling unneeded possessions to raise some cash.

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

During the COVID-19 pandemic, student loan repayment has been paused, bringing relief to many a budget.

If that applies to you, you may have chipped away more at your card debt as your budget has had more room for credit card bills.

This, however, may soon change.

“The student loan forbearance period is currently set to expire no later than 60 days after June 30, 2023,” says Hanneh Bareham, Bankrate’s expert in student loans. “Borrowers that have taken advantage of the federal relief period will need to take a look at their monthly federal student loan payments and interest rates in comparison to their other debts. While borrowers should prioritize high-interest debt, like credit card debt, it’s also crucial that they make at least the minimum payments on all of their lower-interest debts as well — including their student loans.”

According to Bareham, having to make this monthly student loan payment again could cut into your ability to pay off other debts. For that reason, it’s best to research the forgiveness options and benefits that the government offers to federal student loan borrowers.

“There are different repayment plans offered, like income-driven repayment plans, that can make the monthly amount more manageable,” Bareham suggests. “There are also federal forgiveness programs, like Public Service Loan Forgiveness (PSLF), that forgives the remaining federal student loan balance for qualifying public servants after 120 on-time payments.”

Whether or not you decide to take advantage of any forgiveness options, it’s best to try and pay down your credit card balances by June to avoid overwhelming your budget with multiple types of debt.

If that’s not enough time to pay off your balances, don’t fret. 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 at a fee (usually between 3 percent and 5 percent) and pay no interest for the length of an intro period.

In 2020, such cards became rare, as credit card issuers tightened underwriting on many card products. By 2021, however, the credit card market was booming, and balance transfer cards made a comeback. They returned with a bang, with some cards now offering up to 21 months of no interest.

To see how this works in practice, let’s go back to our example of having $5,474 in debt.

“In that scenario, you could make 21 equal payments of approximately $261 to knock out that $5,474 debt without paying interest,” Rossman says.

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 despite balance transfer cards becoming available again, it’s best to make sure your credit score is in good shape before you apply. Balance transfer cards typically require good or excellent credit.

You may be missing out if you’re not looking into a new card

Without a doubt, if you’re carrying a balance, it’s wise to focus on paying it down. There isn’t much point in earning credit card rewards if you’re paying more in interest than you earn in points or cash back. However, if you don’t have any credit card debt and you haven’t applied for a new card in a while, you may be missing out.

The Bankrate survey found that 28 percent of Gen-Z and 27 percent of millennials have never changed 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’s nothing wrong with that. It’s understandable that not everyone wants to dedicate time to staying on top of credit card offers at all times.

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

If you’re interested in upgrading your credit card game, 2023 is the year to do that.

In 2021, some of the best credit cards received upgrades which made them even more desirable. Since then, even more credit card offers have entered the market, some shaking the industry.

More credit cards for consumers with bad or no credit began to offer rewards. Balance transfer intro periods became longer. The news on the premium travel cards front signaled such cards are on their way to becoming more attainable.

You can score some major cash back this year if you take time to compare credit card offers and strategize your spending. The credit card market will likely continue to evolve this year, making offers even more appealing.

Of course, the process of picking the right card can be a bit overwhelming. If you’re not sure where to start, take a look at the 2023 Bankrate Awards winners. Using a rigorous scoring system, our experts reviewed over 250 of the top cards to share the crème de la crème of credit cards with you.

The bottom line

Credit cards may not be top-of-mind as you enter the new year. Still, not being aware of what’s going on with credit card rates and the market itself may impact your wallet, whether your debt becomes more expensive, your budget needs adjusting or you’re missing on potential savings and rewards.

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