Credit card rates keep going up – with no end in sight.
The national average interest rate in currently 18.03%, according to Bankrate.com. That’s the highest rate since 1996, the company says, and it’s making it even more expensive to carry a balance.
“If you only make minimum payments, you’re going to be in credit card debt for a really long time,” said Ted Rossman, senior industry analyst at Bankrate.
The average credit card balance is currently $5,270, according to TransUnion. At 18% interest, if you only make minimum payments, you’ll be in debt for more than 16 years, and you’ll pay more than $6,500 in interest, Rossman told me.
“So, we definitely need to come up with a better plan than that,” he said.
Remember, credit card rates track what the Federal Reserve does. And right now, the best guess is the Fed could raise rates by a point or more by the end of the year.
“So, we could actually be looking at an all-time record for credit card rates,” Rossman said. “Our database goes back to the mid-eighties. We’ve never hit 19%, but there’s actually a pretty good chance that we will later this year or early next if the Fed continues on this path.”
More Info: Current Credit Card Interest Rates from Bankrate
