Credit card interest rates have reached an all-time high of 22.8%, driven by rising borrowing costs and increased profit margins for issuers. While credit card companies cite higher risk as justification, the percentage of subprime credit score holders with credit cards has remained stable. Consumers can avoid high interest by paying bills on time or transferring balances to cards with 0% introductory APR offers.
Responding to excessive credit card costs, the Consumer Financial Protection Bureau has enacted new regulations to limit late fees. Previously, cardholders faced substantial late fees and compounding penalties, leading to high debt, damaged credit, and difficulty accessing affordable loans. The new rule aims to alleviate financial burdens by reducing late fees, potentially saving consumers billions of dollars and mitigating the adverse effects on their credit scores. This addresses the rising financial stress and challenges faced by many consumers due to increasing costs and interest rates.
