The Federal Reserve bumped up its most important interest rate another quarter point on Wednesday, its seventh rate hike since late 2015. The Fed's target federal funds rate is now between 2 and 2.25 percent, after the central bank kept it at zero or near zero in the years following the financial crisis. MagnifyMoney analyzed Fed data to see how the rates consumers pay for loans and earn on deposits have changed since the central bank started raising them. In short, we find Fed rate changes have wide-ranging implications for consumers. Credit card borrowers are paying $110 billion in interest annually, up $31 billion from the annual $79 billion they paid prior to the first Fed rate hike in December 2015, making introductory 0 percent APR deals all the more attractive for some borrowers. Meanwhile, depositors earned significantly more from savings accounts. In the 12 months ending in June 2018, depositors earned $26.8 billion in interest on their savings accounts, up $16.8 … [Read more...] about Fed rate hike: Here’s how it hits credit cards, loans, savings accounts
Zero percent apr credit cards
Susan Tompor Detroit Free Press Published 12:06 p.m. UTC Jun 14, 2018 For roughly a decade, millions of consumers could afford to focus on the rewards and ignore the rates on their credit cards. "They haven't really had to think too much about interest rates because they didn't change that much," said Robert A. Dye, chief economist at Comerica Bank. Game over. Get ready for higher rates on your credit cards after more rounds of Fed rate hikes this year and next. Many consumers may not realize it but the interest rates on credit cards aren't fixed. Most credit cards have what are called "variable rates." As a result, the interest rate consumers pay on credit card debt typically ticks up each time the Federal Reserve raises rates. On Wednesday, the Fed raised rates by a quarter-point once again. The target range for the federal funds rate will be 1.75 percent to 2 percent. A rate hike by the Fed translates into a higher prime rate. The Fed said economic … [Read more...] about Why Fed rate hike can drive you to pay down credit cards
It is hard to beat the convenience of a credit card for purchases, but does that same convenience make it worth paying your taxes by credit card? It might, but that depends on several factors involving money and time. "Your credit card is usually a high-interest option, but it is an option," opines Betterment head of tax Eric Bronnenkant. Before deciding whether to put your tax bill on plastic, consider the following: Fees – By law, the IRS cannot pay credit card transaction fees. As a result, credit card payments to the IRS are handled through secure third parties approved by the agency. See the IRS website for a list of the approved payment processors and their fees. What to Do When You Owe Taxes But Can't Pay the Bill Credit card fees are percentage-based with a minimum "convenience fee" for smaller bills ranging from $2.50 to $2.69. Percentages range from 1.87 percent to 2.00 percent of the total tax bill depending on the vendor and the type of card … [Read more...] about Should You Pay Your Taxes With a Credit Card?
Last Updated Oct 20, 2016 10:22 AM EDT It’s no secret that store-branded credit cards can carry some hefty interest rates. But Big Lots (BIG) is the worst offender among retailers in the category of those that charge rates akin to the penalty rates imposed on consumers with poor credit or behind in their payments.Big Lots, a discount retailer with 1,445 stores in 47 states, tops the list with an annual percentage rate of 29.99 percent, according to a CreditCards.com report out Thursday. “Essentially that’s what a lot of general-purpose cards will charge as a penalty rate for people who’ve been 60 days late or made mistakes,” said Matt Schulz, CreditCards.com’s senior industry analyst. “This should raise some eyebrows.” The private-label credit card introduced in May includes an interest rate “consistent with the rate of other value oriented furniture store credit cards and Big Lots has the option of an introductory six or … [Read more...] about Lots of interest in this card, and that’s not a good thing
Justin Barton has had several credit cards over the years, but the 35-year-old admits he has not actually read any of the contracts that go along with them. “I’ve never really read it in detail, just skimmed through it and signed my name to it,” he said. That’s because Barton, like many Americans, finds the contracts too confusing. “There’s a lot of fine print in there,” Barton said. “You almost need a law degree to understand it.” According to a new analysis from CreditCards.com, about 75 percent of Americans do not regularly read their credit card’s contracts. The analysis also found that the average contract requires reading at an 11th grade level, yet half of the adult population reads at a 9th grade level or below. Plus, the average agreement is nearly 5,000 words long. In fact, the less a consumer might appear to understand, the better chance they will be targeted with high-risk offers from credit card companies. … [Read more...] about Reading the fine print: Why credit card agreements are so hard to understand