Interest Rates On The Rise This Holiday Season

MoneyTips

America has been enjoying historically low interest rates for years – but those days are coming to an end. Since 2015, the Federal Reserve has been slowly raising baseline interest rates from the near zero levels necessary to bring America out of the Great Recession. As of October 2018, the Fed's prime rate was at 2.19% – the highest it's been in over a decade.

Why should you care? Because the Fed's interest rate increases are generally passed on to credit card interest rates, forcing you to pay more in interest charges on any balances you carry.

According to CreditCards.com, the average annual percentage rate (APR) on all credit cards is 17.14% – the highest average rate since CreditCards.com began tracking them in 2007. The Federal Reserve may raise interest rates again in their December meeting, just in time for rates to increase on balances from your holiday shopping.

How much does interest cost over time? Consider the simple example of $1,000 balan...

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