Your credit card bill is going to get a little bit higher in 2017.
When the Federal Reserve raised interest rates last month for only the second time in a decade, very little was discussed on the ramifications it would have on American consumers. The one area that should have been touched upon by our esteemed experts in the media were debt servicing payments.
Well, now we can understand just how much Americans can pay in additional credit card charges until the next rate hike by Janet Yellen and Co.
According to a new report from Wallet Hub, a personal finance website, the Fed’s increase to interest rates will cost U.S. consumers approximately $1.4 billion in extra credit card fees.
If the Fed does proceed with its nine rate hikes over the next three years, it should be rather interesting to see how millions of Americans will cope with the maintenance of their credit cards. With total U.S. credit card debt nearing $750 billion, many households will have a tough time in these next few years to cover the interest on their $16,000 credit card statement.
This should be a wake up call for anyone who has credit card debt. All interest rate increases are passed on to the users of credit, the banks are not going to lose any money. I for one am paying down my credit balances by $500 per month. I will be debt free in Aug 2018. Then I will use the banks money and pay the balance off each month.