Highest credit card rate since 1996

average Credit card The price has reached its highest point in decades, according to a recent survey by Bankrate.com.

Bankrate.com survey On Wednesday, it found that the average credit card rate hit a record high of 17.96%. That rate is up 3.5% from about a month ago and up 10.8% from the 16.21% rate about a year ago, according to Bankrate.com.

Survey results retracted fees for excess and insufficient funds, and ATM fees rose

Bankrate.com said Wednesday’s average interest rate was the highest since 1996.

“Fed Chair Jerome Powell has made it clear that the Fed has not finished raising rates — not far-reaching,” Ted Rossman, chief industry analyst at Bankrate.com, said in a statement.

Chairman of the Federal Reserve Jerome Powell He noted in a speech last week that Fed He will continue to take steps to return hyperinflation to its 2% target, which he said He said It can bring “some pain to families and businesses.”

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“Almost all credit cards have variable rates that track the key interest rate, which is three percentage points higher than the federal funds rate set by the Federal Reserve,” Rossman added. “So there is a direct transition from the Fed’s actions to credit card holders.”

The Fed approved two of the 75 in a row Increases base point In June and July. Officials suggested raising interest rates again Most likely it will happen Later in September, CME Group’s FedWatch Tool Offers Many traders expect the Fed to make a third 75 basis point hike when the committee meets.

To avoid paying more on your credit card balance, Ted Rosman, senior industry analyst at Bankrate.com, suggests best practice is to “pay more than the minimum” each month. (iStock / iStock)

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“Rate increases generally affect new and existing balances, so most credit card holders are currently experiencing rates 225 basis points higher than they were just six months ago,” Rossman said, adding that there is a “large cumulative effect of these rate increases.”

to avoid pay more On your credit card balance, Rossman suggests best workout It is “paying more than the minimum” every month.

“Pay it all out if you can,” Rossman said. “If that’s not possible, forget about rewards and ask for the lowest possible interest rate. There are 0% balance transfer offers that last up to 21 months.”

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The New York Federal Reserve’s quarterly report on household debt and credit released in early August revealed credit card debt held by American households. 13% increase on an annual basis in the second quarter of 2022. That increase was the largest jump since 1999.