NEW YORK — Mortgage rates, credit card rates, auto loan rates, and business loans with variable rates will all likely maintain their highs, with consequences for consumer spending, after the Federal Reserve indicated Wednesday that it doesn’t plan to cut interest rates until it has “greater confidence” that price increases at the consumer level are slowing to its 2% target.
The central bank kept its key rate at a two-decade high of roughly 5.3%, where it has been since last August.
Here’s what to know:
What does this mean for borrowers?
Credit card rates are at or near all-time peaks, and mortgage rates have more than doubled in recent years.
According to LendingTree, the average credit card interest rate in America today is 24.66%, unchanged from last month, though that rate has risen for 24 of the last 26 months.
“That isn’t likely to fall anytime soon, despite the Fed taking its foot off the gas,” said LendingTree Credit Analyst Matt Schultz. “That’s likely the unfortunate reality for the next several months.”
In the battle against credit card debt, 0% balance transfer cards “are still your best weapon,” according to Schultz, but “they’re getting harder to get and their fees are rising.”
With delinquencies and debt totals also increasing for consumers, some banks are becoming more hesitant about taking on transferred balances, he said, meaning consumers will need good credit to get approval.
