High Interest Credit Card Debt
As of October 23rd, 2024, the national average credit card interest rate is a whopping 28.7% (Forbes).
Credit card interest rates can vary by individual based on factors such as credit score and debt-to-income ratio. For example, someone with a Superprime credit score (740+) will have a different credit card interest rate than someone with a 550 credit score.
The Impact
One might think that a few percentage points might not make a huge difference when it comes to interest accrued. However, it drastically impacts how long it takes consumers to pay off their credit cards and can add thousands to the amount of interest paid.
What’s Contributing To High Credit Card Interest Rates?!
The Federal Reserve began collecting data on average credit card interest rates in 1994, and they are currently the highest in recorded history.
Credit cards gain profit from the interest charged to the consumer. Profit margins are driven by setting rates high enough to recouperate funds even when some people default on their payments. While it’s been all over the news that the Fed cut interest rates, this has the ability to influence credit card rates. However, those changes aren’t likely to be immediately felt or be as drastic as we might hope.
The Result
High credit card interest rates are impacting the 80% of Americans who currently carry credit card debt. The average American has $6,501 in credit card debt, which is calculated to be 1.13 trillion dollars nationally. That is hundreds of billions of dollars profiting credit card lenders and millions of people who can’t seem to get ahead of paying down their debts.
If you’re like the millions of Americans who are carrying high interest debt, stay tuned for more information about how Imagine Home Leding can help. You can also contact your local Imagine Home Lending Loan Officer today.
