Credit Card , Interest Rates , Reach All-Time High .
NBC reports that the cost of credit card debt
is now the highest it's been in over 30 years,
with average interest rates up to 19.04%.
Bankrate has been surveying credit card
rates since 1985, and this eclipses
the previous all-time high
of 19.00% from July 1991, Greg McBride, Bankrate chief financial analyst, via NBC.
The new all-time high comes as the Federal Reserve
has made its largest key federal funds rate hike
in over a decade in an effort to combat inflation.
NBC reports that the Fed's plan is to raise
the cost of borrowing in hopes that it will
slow the economy and ease rising prices.
This has ratcheted the prime rate
up to 7%, which is what banks charge
the most creditworthy customers.
The prime rate is also used
to determine the final annual
percentage rate for a credit card. .
According to Bankrate, someone paying the
minimum payment on a $5,000 credit card debt
would pay over $6,000 in interest over 15 years.
You don’t feel it on a monthly basis,
but minimum payments are a trap, Ted Rossman, Bankrate Senior Industry Analyst, via NBC.
You don’t feel it on a monthly basis,
but minimum payments are a trap, Ted Rossman, Bankrate Senior Industry Analyst, via NBC.
If you as an individual have credit card debt
with an interest rate near 20%, that needs to
be priority — it's three, four, five times
higher than other forms of debt, Ted Rossman, Bankrate Senior Industry Analyst, via NBC