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6 times your credit card interest rate could rise
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Credit card interest rates have been on a swift upward trajectory over the past few years, with card rates climbing from an average of 16.28% in 2020 to today’s record-high rate of 22.76% — an increase of nearly 40% in just four years. This uptick in rates has caused significant financial strain for many cardholders, as any unpaid balances can quickly accrue significant amounts of interest. If that happens, it can be challenging to make meaningful progress in paying down your debts.
There are clear signs of the impact that today’s high-interest-rate environment is having on cardholders. For example, there has been a troubling rise in maxed-out credit cards and payment delinquencies recently, which suggests that many cardholders are struggling to keep up with their financial obligations. The total amount of credit card debt has also been increasing nationwide, indicating that cardholders are becoming more reliant on this short-term borrowing option.
And while it’s likely that the wider rate environment will shift soon due to easing inflationary pressures, there’s still a distinct possibility that your credit card issuer could increase your credit card interest rate this fall. Understanding when and why your card issuer can increase your rate is crucial for protecting your financial future. Below, we’ll break down what you should know now.
Need to get rid of your high-rate credit card debt? Find out how a debt relief expert could help.
6 times your card issuer can raise your credit card interest rate
If your credit card interest rate has increased recently, or if you notice an uptick in your rate in the coming months, here’s why it may have happened:
Your card issuer raised its rates
Credit card companies will periodically review and adjust their interest rates based on various economic factors and internal policies — and while the wider rate environment can play a role in these decisions, it’s not the only factor. So, while the upcoming Fed rate cut (which is expected in September) will likely have a positive impact on mortgage and personal loans, card issuers are under no obligation to follow suit.
If you’ve held your card for at least a year, your issuer’s future rate decisions could lead to an increase in your credit card interest rate. They are required to provide you with 45 days’ notice before implementing these types of changes, though, so it’s important to stay vigilant and carefully review any communications from your card company.
Find out how the right debt relief strategy could help you lower the cost of your credit card debt.
You made a late payment on your account
Late credit card payments can have severe consequences, including triggering penalty annual percentage rates (APRs). These rates are significantly higher than your standard APR and can be applied to your account if you fail to make a payment within 60 days of the due date. That’s why it’s important to set up automatic payments or reminders to ensure you never miss a payment. Otherwise, your card APR could be increased temporarily if you’re more than 60 days late on a payment — and you’ll need to make three consecutive on-time payments to get rid of that penalty APR.
An introductory rate offer is ending
Many credit cards offer attractive introductory rates, such as 0% APR on purchases or balance transfers for a limited time. If you’ve been enjoying the benefits of this type of promotion, be aware that its expiration could result in a substantial rate increase. It may help to mark your calendar for when these promotional periods end and plan accordingly to minimize the impact on your finances.
There was a drop in your credit score
Your credit score plays a crucial role in determining your credit card interest rate. If your credit score has decreased recently due to factors like increased credit utilization, missed payments on other accounts or even minor issues like hard inquiries, your card issuer may respond by raising your credit card interest rate. Regularly monitoring your credit score and addressing any issues promptly can help you maintain more favorable rates.
You didn’t comply with the terms of your card agreement
Credit card agreements contain specific terms and conditions that cardholders must adhere to. Violating these terms, such as exceeding your credit limit or using the card for prohibited transactions, can give the issuer grounds to increase your interest rate. So, you should always read and understand your card’s terms to avoid inadvertently triggering a rate hike.
A fixed-rate period expired
Credit cards generally have variable rates, but some credit cards offer fixed rates for a certain period. If your card has such a feature and that period is ending, you may see your rate increase to a variable APR that fluctuates with market conditions.
The bottom line
Your credit card interest rates can be impacted by the wider rate environment, but it’s important to understand that those aren’t the only factors driving your card rates. If you want to avoid unpleasant surprises, it’s important to stay vigilant and proactive in managing your credit card accounts. That way, you can better position yourself to navigate the challenges of a potentially rising interest rate environment and avoid the pitfalls of paying more interest on your credit card charges.
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Yellowstone hiker burned when she falls into scalding water near Old Faithful, park officials say
Yellowstone National Park, Wyo. — A New Hampshire woman suffered severe burns on her leg after hiking off-trail in Yellowstone National Park and falling into scalding water in a thermal area near the Old Faithful geyser, park officials said.
The 60-year-old woman from Windsor, New Hampshire, along with her husband and their leashed dog were walking off a designated trail near the Mallard Lake Trailhead on Monday afternoon when she broke through a thin crust over the water and suffered second- and third-degree burns to her lower leg, park officials said. Her husband and the dog weren’t injured.
The woman was flown to Eastern Idaho Regional Medical Center in Idaho Falls, Idaho for treatment.
National Park Service / Jacob W. Frank
Park visitors are reminded to stay on boardwalks and trails in hydrothermal areas and exercise extreme caution. The ground in those areas is fragile and thin and there’s scalding water just below the surface, park officials said.
Pets are allowed in limited, developed areas of Yellowstone park but are prohibited on boardwalks, hiking trails, in the backcountry and in thermal areas.
The incident is under investigation. The woman’s name wasn’t made public.
This is the first known thermal injury in Yellowstone in 2024, park officials said in a statement. The park had recorded 3.5 million visitors through August this year.
Hot springs have injured and killed more people in Yellowstone National Park than any other natural feature, the National Park Service said. At least 22 people have died from hot spring-related injuries in and around the 3,471-square-mile national park since 1890, park officials have said.
TRENTON, N.J. — Democratic Newark City Council President LaMonica McIver has defeated Republican small businessman Carmen Bucco in a contest in New Jersey’s 10th Congressional District that opened up because of the death of Rep. Donald Payne Jr. in April.
McIver will serve out the remainder of Payne’s term, which ends in January. She and Bucco will face a rematch on the November ballot for the full term.
McIver said in a statement Wednesday that she stands on the “shoulders of giants,” naming Payne as chief among them.
She cast ahead to the November election, saying the right to make reproductive health choices was on the ballot as well as whether the economy should benefit the wealthy or “hard working Americans.”
“I will fight because the purpose of politics and the purpose of our vote is to give the people of our communities and our nation a bold voice,” she said.
Bucco congratulated McIver on the victory in a statement but said he’s looking forward to the rematch in November.
“I am not going anywhere,” he said in an email. “We still have a second chance to make district 10 great again!”
Who are LaMonica McIver and Carmen Bucco?
McIver emerged as the Democratic candidate in a crowded field in the July special election. A member of the city council of New Jersey’s biggest city since 2018, she also worked for Montclair Public Schools as a personnel director and plans to focus on affordability, infrastructure, abortion rights and “protecting our democracy,” she told The Associated Press earlier this summer.
Bucco describes himself on his campaign website as a small-business owner influenced by his upbringing in the foster system. He lists support for law enforcement and ending corruption as top issues.
The 10th District lies in a heavily Democratic and majority-Black region of northern New Jersey. Republicans are outnumbered by more than 6 to 1.
It’s been a volatile year for Democrats in New Jersey, where the party dominates state government and the congressional delegation.
Among the developments were the conviction on federal bribery charges of U.S. Sen. Bob Menendez, who has denied the charges, and the demise of the so-called county party line — a system in which local political leaders give their preferred candidates favorable position on the primary ballot.
Democratic Rep. Andy Kim, who’s running for Menendez’s seat, and other Democrats brought a federal lawsuit challenging the practice as part of his campaign to oust Menendez, who has resigned since his conviction.