The Fed held interest rates steady, but credit card APRs keep going up
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Even if there is a federal reserve among them, the credit card rates are higher.
In June, credit card interest rates increased for the third flat month and reached the highest level since December. Measurement.
According to Bankrate, now the average annual percentage rate is slightly above 20%. According to LendingTre, the average APR for new cards up to 24.3%.
“These are the disability rates that combine your debt to such a quick clip,” Corned Cornell, a certified financial planner, is a financial consultant in the bone FIDE pest in New York. He said.
Credit card rates remained constant for years after the release of the Credit Card Law in 2009, but after the FED started to increase the rates in 2015, it increased. Since then, in ten years, APRs have doubled from about 12% to today.
Most credit cards have a variable ratio, so there is a direct connection to the Fed’s criterion.
Credit card rates, the Central Bank of March 2022 on the 11th rate increases with a period of increase again.
Although the FED has interrupted its comparison three times in 2024 and has kept its criterion constant since December, banks continued to increase credit card interest rates to record levels, and some exporters said they would keep these higher rates in place.
“This unfortunate trend can continue in the coming months,” Lendingtre’s credit analyst Matt Schulz said.
Why some APRs are still rising
According to Schulz, card exporters reduce their exposure to payments or borrowers who may default. “This is a sign of banks trying to protest themselves from the risk that is there at these uncertain times.” He said.
But it is also a two -way street. Transunion Vice President and Vice President of Global Research and Consultancy Charlie Wise, “When there is uncertainty in the market, this is usually looking for new loans to ensure that consumers are prepared for any future financial obstacle,” he said. This also has the effect of driving forces to increase APRs.
“If more risky borrowers in the hands of more risky borrowers, these rates will show higher tendency.” He said.
How to avoid high interest rates of sky
Consumers with only balance Feel the pain of high APRs from moon to month. And higher APRs are not for new loans, not for new loans, but for new loans, as with new applicants for credit cards.
However, for those who are currently struggling with sky high interest charges, even a final sacrifice may not provide much relief.
“The truth is that you can reduce the Fed fund ratio two full points, and all you do is to reduce your interest rate from 22% to 20%,” Wise – this is not a significant difference. “
Schulz, instead of waiting for a ratio deduction that may be far away for months, borrowers can now switch to zero -indifferent balance transfer to credit card or unite high -interest credit cards and high -interest credit cards with a lower rate of lower personal loans.
“The truth is that people have more power than they think if they have good loans on the rates they pay.” He said.
The better your loan, the lower the ratio you can offer for a new card account.
Experts say that card holders who protect their balance – or the ratio of the debt to the total loan of the debt can also benefit from credit card awards and higher credit points. This paves the way for lower cost loans and better conditions.
