charged on credit card accounts have risen from just over 16% in February 2022, before the Fed began raising rates, to just over 22% as of May 2023, says Renter. "And if you carry a balance from one month to the next, this quiet increase could be costing you hundreds or even thousands of dollars," Renter tells FOX Business.
For example, Renter illustrates, if you have $10,000 in credit card debt and want to pay it off in three years, that higher interest rate means making bigger payments and therefore paying more interest over the three-year period. Other rates, like credit card interest rates, fluctuate over time. " If you carry a balance from month to month on a credit card, higher rates make it more expensive to do so. And because it’s more costly, it may be more difficult to get your balances paid down," she added.According to Renter, part of the increase in credit card debt is due to inflation.