- ORIGINAL NEWS
Credit card interest rates are at record highs. Cards have ‘never been this expensive,’ CFPB says
- SUMMARY
Credit card interest rates have reached record highs, with the average annual percentage rate (APR) at 22.8% at the end of 2023.
This increase is partly attributed to rising borrowing costs set by the Federal Reserve and a significant growth in the profit margins of credit card issuers.
Almost half of the total credit card interest rate increase in the past decade is due to issuers raising their APR margins.
While credit card companies justify the higher profits by claiming increased risk, the share of consumers with subprime credit scores holding a credit card has remained relatively stable.
To avoid paying high interest, it’s important to pay credit card bills on time and in full or consider transferring existing balances to a new card with a 0% introductory APR offer.
- NEWS SENTIMENT CHECK
- Overall sentiment:
negative
Positive
“There’s a way consumers can sidestep higher interest rates entirely.”
“Consumers with good credit may also be able to transfer an existing balance to a new credit card with a 0% APR introductory offer.”
Negative
“Credit card interest rates are at all-time highs.”
“APRs have jumped as the Federal Reserve has raised borrowing costs.”
“The average consumer paid a 22.8% interest rate on their credit card balance at the end of 2023, the highest since the Federal Reserve began tracking data in 1994.”