In an effort to reduce inflation, the Federal Reserve increased the cost of borrowing by raising its federal funds rate by 0.5%. Consumers will likely see an increase in the interest rates for their credit cards and adjustable-rate mortgages. Additionally, the cost of financing a car or obtaining a home equity line of credit has gotten more expensive.
An increase of 0.5% equates to an extra $50 of interest for every $10,000 in debt owed by a borrower. Therefore, borrowers could be paying hundreds of dollars more per month if they carry credit card balances or have adjustable-rate mortgages. For consumers already struggling with higher costs for food, gas and everyday items, the increased debt payments may be financially devastating. And experts predict that you can expect to see these higher APRs in your next couple of billing cycles. It is important for consumers to know that they may contact their credit card provider to request a lower rate.
If you have questions regarding this issue, or any debt-related issue, please contact our attorneys.