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Many Americans pay a heavy price for credit card debt.
As the primary source of unsecured debts, 60% of credit cardholders are borrowed in the month by a new report New York Federal Reserve Bank.
At the same time, credit card interest rates are “very high”, in 2023, an average of 23%, Fed from New York, one of the most expensive roads to borrow money from New York.
“Using credit cards for the American community’s purchases, the interest rate added to these products with the vast majority of the American community,” said Cardrates.com “, this is how much it is already a stress to a dense budget.”
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There is a variable rate on most credit cards, ie means direct connection to the criterion of the federal reserve. However, credit card creditors are higher than the high level of the main debt ratio of the Central Bank, currently a number of from 4.25% to 4.5% since December.
In 2022 and 2023, after the increase in the federal reserve, the average credit card rate increased from 16.34% to 20% – more than 20% – a significant increase in the fed to fight inflation.
“The card issuers determined what the market will be held and what this interest rate will do,” said Matt Schulz, General Analyst Matt Schulz in Lendertree.
As the central bank prices decrease, Aprz will descend, but they will still be very high level. According to Schulz, with a few potential potential potential points cuts, APRs are not likely to fall too much.
Schulz said that despite the peril yeast value, consumers often said they were often more accessible to credit cards and partially other loans.
In fact, credit cards do not last a higher creepy of the credit card sign of the number 1, non-secured debt and Americans. In the last year, the credit card debt has increased the record for $ 1.21 trillion.
Because credit card lending is not provided, it is also a risky loan of banks.
“Lenders adjust interest rates for two main reasons: value and risk,” Cursmates’ Sandberg said.
The Federal Reserve Bank of the Federal Reserve of New York is 3.96% of the total balances between 2010 and 2023 in credit card charges.
As a result, according to NY Fed, about 53% of banks’ annual standard losses are related to credit card lending research.
“When you offer everyone a product, you take a terrible risk,” he said.
In addition, “When it becomes difficult, they are tougher for everyone,” he said. “This makes it more difficult for card issuers.”
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“There is a great competition in the credit card market,” Sandberg said. This 0% balance transmission credit card offers are still wide as creditors are constantly trying to capture new cardholders.
Cards that offer 12 or even 24 months of 24 months, are the best tool for your instruments, “Schulz said in two years.”
