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December 14, 2004
Now watch those credit card rates
The Federal Reserve voted on Dec. 14 to raise short-term rates another quarter point -- to 2.25%, up from just 1% in June. The announcement came a little after 2 p.m. and was quickly followed by banks announcing they were hiking their prime lending rate. Bank of America, Fleet, and Wells Fargo, for example, have all said they are raising their rate to 5.25%.
That means credit card rates, which are tied to the prime rate will be heading higher.
This is all the more reason to try to keep your holiday spending in check. Data released December 13 by Visa USA found that spending on Visa cards during the prior week totaled nearly $27 billion -- a 16% increase over the same period in 2003. The sales volume that weekend (Dec. 10-Dec. 12), was also 15% higher than the weekend following Thanksgiving -- traditionally thought of as the busiest shopping days of the year.
Looks like a lot of people are loading up on credit card debt at the same time that credit card rates are moving higher.
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Yes! Keep an eye on those credit cards! Rates have been on the rise all year. You'll be hard-pressed to find any 0% interest credit card offers under 9.99% APR. And even those are hard to find since the last Fed rate hike! If you don't have a fixed rate on your current credit card, more than likely the rate has risen (without your knowledge).
Luckily, there is still wide variety of "teaser" rate cards out there if you want to avoid those interest charges. Many offer 0% APR on balance transfers for 12 months (or more).
As long as you use the 0% APR credit cards wisely, they can help you save money and eventually become debt free.
Posted by: ASAP Credit Card at September 27, 2005 09:24 AM