PaymentsJournal
No Result
View All Result
SIGN UP
  • Commercial
  • Credit
  • Debit
  • Digital Assets & Crypto
  • Digital Banking
  • Emerging Payments
  • Fraud & Security
  • Merchant
  • Prepaid
PaymentsJournal
  • Commercial
  • Credit
  • Debit
  • Digital Assets & Crypto
  • Digital Banking
  • Emerging Payments
  • Fraud & Security
  • Merchant
  • Prepaid
No Result
View All Result
PaymentsJournal
No Result
View All Result

Whoop, There It Is: Fed Increase affect Credit Cards

By Brian Riley
March 22, 2018
in Analysts Coverage
0
1
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn
Close-up picture two credit cards with numbers

Close-up picture two credit cards with numbers. Macro. Small Depth of field

Credit cards with interest rates pegged to the Prime Rate, such as those that indicate something similar to “These APRs will vary with the market based on the Prime Rate” will rise quickly after the Fed’s recent ruling to increase.  Two more increases are expected this year.

Consumers will see modest increases.

 

  • The rate hike on Wednesday could add $12.50 a year in interest to a credit card with a balance of $5,000 and an interest rate of 14.99 percent, the average in the fourth quarter of 2017, according to Fed data.

It is critical for card issuers to keep an eye on credit quality. $1 a month will not kill anyone, however, when you think of the leveraged consumer, there might be some unprepared challenges.

  • But consider that approximately $62.50 a year has already been added as a result of the Fed’s previous five rate hikes since late 2015, and interest payments may be up by $100 at the end of the year.
  • That mortgage owner could pay an additional $312.50 a month, or $3,750 a year in interest if the Fed follows through with two more quarter-point hikes this year.

Consumers have enjoyed low-interest rates since the Fed froze them during the recession, but the winds have changed.  Maybe this is a good time to take advantage of better savings rates!

Overview by Brian Riley, Director, Credit Advisory Service at Mercator Advisory Group

Read the quoted story here

1
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn
Tags: Credit Cards

    Get the Latest News and Insights Delivered Daily

    Subscribe to the PaymentsJournal Newsletter for exclusive insight and data from Javelin Strategy & Research analysts and industry professionals.

    Must Reads

    digital cards

    Beyond Plastic: Why Digital Cards Are the Future of Credit

    July 8, 2025
    What Premium Card Overhauls by Chase and Amex Reveal About the Credit Card Market

    What Premium Card Overhauls by Chase and Amex Reveal About the Credit Card Market

    July 7, 2025
    Rewire Acquires Imagen, Looking at Prepaid Cards for Migrant Workers

    Smells Like Team Spirit: What Makes Cobranded Credit Cards Work

    July 3, 2025
    uk banking outages

    New Continuous Strategies for Battling Account Takeovers

    July 2, 2025
    Fraud Monitoring

    What to Expect When Nacha’s Fraud Monitoring Rules Take Effect

    July 1, 2025
    payments

    Don’t Just React to What’s Next in Payments—Anticipate It

    June 30, 2025
    consumer debit

    As Payment Types Proliferate, Debit Cards Still Go Strong

    June 26, 2025
    Embedded Payments

    How Embedded Payments Is Optimizing the Expense Management Process

    June 25, 2025

    Linkedin-in X-twitter
    • Commercial
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Digital Banking
    • Commercial
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Digital Banking
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    • About Us
    • Advertise With Us
    • Sign Up for Our Newsletter
    • About Us
    • Advertise With Us
    • Sign Up for Our Newsletter

    ©2024 PaymentsJournal.com |  Terms of Use | Privacy Policy

    • Commercial Payments
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    No Result
    View All Result