Credit card rates over 20%
Most credit cards come with a variable interest rate a direct link to the Fed’s key interest rate.
Following previous interest rate increases, the average credit card interest rate is now over 20% – an all-time high. Additionally, because most people feel burdened by higher prices, balances are higher and more cardholders end up in debt from month to month.
Even without a rate increase, APRs could continue to rise, said Matt Schulz, chief credit analyst at LendingTree. “The truth is that today’s credit card fees are the highest in decades and will almost certainly continue to rise in the coming months.”
Mortgage interest rates are 8%
Although 15- and 30-year mortgage rates are fixed and tied to U.S. Treasury yields and the economy, anyone buying a new home has suffered significant losses in purchasing power, due in part to inflation and monetary policy measures Fed.
The average interest rate for a 30-year fixed-rate mortgage is up to 8%, the highest in 23 years, according to Bankrate.
“In 2023 alone, interest rates have risen by two full percentage points,” said Sam Khater, chief economist at Freddie Mac. “Buying activity has virtually come to a halt, affordability remains a significant barrier for many and the only way to solve this problem is lower prices and greater inventory.”
Adjustable-rate mortgages (ARMs) and home equity lines of credit (HELOCs) are tied to the prime rate. As the prime rate rose, the prime rate rose, and these rates followed suit.
According to Bankrate, the average interest rate on a HELOC is currently nearly 9%, the highest in over 20 years.
Car loan interest rates exceed 7%
Federal student loans now at 5.5%
Federal interest rates on student loans are also fixed, so most borrowers are not directly affected by the Fed’s actions. But undergraduate students taking out new direct federal student loans now pay 5.50% — up from 4.99% in the 2022-23 academic year and 3.73% in the 2021-22 academic year.
Interest is now due again for existing debtors, which means that the pandemic-related break on bills that has been in effect since March 2020 has come to an end.
The transition back to payment transactions has so far been painful for many borrowers.
Private student loans typically have a variable interest rate tied to the Prime, Treasury Bill, or other interest rate index, meaning these borrowers already pay more in interest. However, how much more varies depending on the benchmark.
In some banks deposit interest rates are up to 5%.
“Borrowers are being squeezed, but the flip side is that savers are benefiting,” said Greg McBride, chief financial analyst at Bankrate.com.
While the Fed does not have a direct influence on deposit rates, yields tend to correlate with changes in the target federal funds rate. According to the Federal Deposit Insurance Corp. Savings account rates at some of the largest retail banks, which have been near rock bottom throughout most of the Covid pandemic, are currently averaging as high as 0.46%.
According to Bankrate, interest rates on the highest-yielding online savings accounts are now over 5%, which is the most savers have earned in nearly two decades.
“Moving your money into a high-yield savings account is the easiest money you’ll ever make,” McBride said.
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Source : www.cnbc.com