Credit Card Rates Continue to Climb Despite Fed Pause

Credit card APRs have surged to their highest levels since last year, with average rates now exceeding 20%. New card offers are even steeper at 24.3%, according to LendingTree data. The relentless rise persists despite the Federal Reserve's rate cuts in 2024 and a prolonged pause since December.

Financial planner Clifford Cornell describes these rates as 'crippling,' with compounding debt accelerating financial strain for balance carriers. This trend isn't sudden—it's the culmination of a near-doubling of APRs from 12% pre-2015, when the Fed began its tightening cycle. Credit cards' variable rates have mirrored each Fed hike, including 11 increases during 2022's aggressive tightening.

The 2009 Credit CARD Act initially stabilized rates, but banks now show no signs of retreat. As debt burdens mount, consumers face an increasingly hostile borrowing landscape with no relief in sight.