Interest rates: Now’s the time to pay off credit card debt – By Gabriella Cruz-Martinez (Yahoo Money) / June 15, 2022
Your credit card debt is about to get more expensive.
The Federal Reserve on Wednesday hiked a benchmark interest rate that credit cards track by three-quarters of a point, the largest increase since 1994. Within 30 to 45 days, the rate on credit cards will follow suit. And the central bank is not done hiking rates, signaling it plans to increase rates by another 1.75 percentage points over its four remaining meetings scheduled this year.
That means credit card debt is only going to get costlier as the year wears on at the same time Americans are ramping up balances, which ballooned almost 20% to $1.103 trillion in April.
“We’re nowhere near the top of how high credit card rates will go,” Matt Schulz, chief credit analyst for LendingTree, told Yahoo Money. “This one rate hike is likely not going to be too concerning for most credit cardholders. The problem is that there have already been two rate hikes and there are almost certainly several more coming, and all of those likely will add up to a big deal.”
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