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Will credit card rates climb in 2025? Experts weigh in

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Credit Risk
If credit card rates climb in the new year, carrying any amount of credit card debt could get even riskier.

Mark Evans/Getty Images


Credit card debt has been surging nationwide — and with rates where they are, it’s no wonder why. According to the Federal Reserve, the average credit card rate sits at over 23% right now — up from just 14% just a couple of years ago and the highest rate on record.

Today’s sky-high credit card rates have made it incredibly hard for consumers to get out of debt. In fact, delinquencies on credit cards have more than doubled on credit cards since 2021 alone.

But credit card rates are variable, so they — and your monthly payment — can change fast. Will rates on credit cards climb in the new year, though?

Find out how to get rid of your existing credit card debt here.

Will credit card rates climb in 2025? Experts weigh in

Want to know where your rates may be headed in the next year? Here’s what experts had to say.

Credit card rates may remain the same

The Federal Reserve reduced its federal funds rate at its last three meetings — a move that typically results in interest rate dips on variable-rate products like credit cards and HELOCs.

But future rate cuts aren’t certain — especially with recent reports showing inflation ticking back up.

“As the Federal Reserve digests the recent election results and economic reports on inflation, housing, and employment, it appears they may be in a rate pause for 2025,” says Jason Fannon, senior partner at Cornerstone Financial Services. “This neutral stance would keep the average credit card interest rate near 21% annually.”

Compare your credit card debt relief options online now.

…or fall slightly

If the Fed does opt to cut rates, credit card rates could fall too — but likely not significantly.

“I don’t expect any significant change to credit card interest rates,” Fannon says. “If the Fed does cut or raise the Fed Funds rate, it would have to be a sizable move in either direction to change the average credit card interest rate.”

Could credit card rates fall below the 20% mark if the Fed reduces its rate? It’s doubtful, pros say. 

“It’s hard to predict beyond 12 months from now but if consumers want to see below-20% rates, then we need a variety of things to align,” says Eric Elkins, founder and CEO of Double E Financial Solutions. “We need inflation to remain below 3% for at least 15 months, we need to see average wage increases above 3%, we probably would need government regulations passed to limit the APR on the credit card institutions, and we’d need the Fed to continue reducing interest rates for borrowers. Lots of things need to occur.”

Other factors that impact your credit card rates

It’s not just the Fed and other economic conditions that weigh on credit card rates. Your credit score can impact what rate you get, too. So, if your score is on the lower end, improving it could help you snag a lower rate on a new card, which you could then transfer your existing credit card balance to.

“Having a good to excellent credit score could make you attractive to other companies,” says Troy Young, founder and president of Destiny Financial Group. “With a high score, you may be able to sell your debt to another company for a lower rate — in other words, refinance it by doing a balance transfer.”

The bottom line

If credit card debt is weighing you down, consider your debt relief options. There are debt consolidation, debt settlement, debt forgiveness and many other strategies that can help you tackle that debt more efficiently. Here are the best debt relief companies to consider if you need professional debt relief guidance.



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Capybaras are the “it” animal inspiration for toys, slippers and T-shirts this holiday season

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Meet Javier the Cappybara


Meet Javier the Cappybara

01:18

The world’s largest rodent is having a big moment.

The capybara — a semi-aquatic South American relative of the guinea pig — is the latest in a long line of “it” animals to get star treatment during the holiday shopping season.

Shoppers can find capybara slippers, purses, robes and bath bombs. There are cuddly plush capybaras and stretchy or squishy ones. Tiny capybaras wander across bedding, T-shirts, phone cases, mugs, key chains, crochet patterns and almost any other type of traditional gift item. Last year, it was the axolotl that took pride of place on many products, and the endangered amphibian remains popular. Owls, hedgehogs, foxes and sloths also had recent turns in the spotlight.

Trendy animals and animal-like creatures aren’t a new retail phenomenon; think the talking Teddy Ruxpin toys of the 1980s or Furby and Beanie Babies a decade later. But industry experts say social media is amplifying which animals are hot — or not.

capypara-yarn.jpg
Yarn capybara with orange

© Liudmyla Konkina @LudovicToys on Etsy; Liudmyla Konkina’s Ravelry Story


“It’s really the launch on TikTok, Instagram and other social media platforms that allow these characters or animals to blow up like crazy,” said Richard Derr, who has owned a Learning Express Toys franchise in Lake Zurich, Ill., for nearly 30 years and is also a regional manager for the specialty toy store chain.

Social media is also speeding up the cycle. Must-have animals may only last a season before something new captures customers’ imaginations.

“It’s really important to keep feeding that beast,” Juli Lennett, a vice president and toy industry advisor at market research firm Circana, said. “If you are an influencer, you’re not going to talk about last year’s stuff.”

Skyrocketing plush toy sales — fueled by a need for comfort during the pandemic — are also increasing the demand for new and interesting varieties, Lennett said. In the first nine months of this year, sales of plush animals were up 115% from the same period in 2019, she said. Overall toy sales rose 38% in that time.

Close Up Of A Capybara With A Bird On Its Back.
Capybara lying on grass with a Cattle Tyrant bird standing on its back.

/ Getty Images


Consumers are seeking out increasingly exotic species that they see in online videos, games and movies. Highland cows, red pandas and axolotls, a type of salamander native to Mexico, have all popped up in popular culture. According to Google Trends, searches for axolotls shot up in June 2021 after Minecraft added them to its game.

“Nobody knew what an axolotl was in 2020,” Derr said. “Now, everybody knows axolotls.”

Cassandra Clayton, a Vermont Teddy Bear Company product designer, said rising sales to adults are also fueling the demand for unique – and collectible – plush toys.

“Stuffed animals are really becoming an ageless item,” she said. “Especially with the boom of self-care in adults and turning towards comfort objects to help de-stress and relax in your life.”

Clayton expects demand for unusual stuffed animals to continue to grow. Among the oddest she has seen: a stuffed version of a water bear, a type of microorganism also known as a moss piglet or a tardigrade.

“It doesn’t necessarily inspire you to cuddle with them, but you’re really seeing the industry start turning towards those characters,” she said. “I think that’s the next trend.”

Figuring out the next “it” animal — or microorganism — is a challenge for toy makers.

“You never know exactly when they’re going to hit and how big they’re going to be,” said Sharon Price John, the president and CEO of Build-A-Bear Workshop, a chain of nearly 500 stores that offers an expanding menagerie of animals and characters for customers to customize, including capybaras and axolotls.

Holidays Animal of the Year
Sharon Price John, President and CEO of Build-A-Bear Workshop, poses for a photo Thursday, Dec. 12, 2024, in St. Louis.

Jeff Roberson / AP


The St. Louis-based company watches social media and gets ideas from talking to store employees and patrons, John said. It usually takes Build-A-Bear up to a year to introduce a new stuffed toy, she said, but the company can move faster if it spots a trend. It sometimes tests a small batch online to make sure a trend is sticking, John said.

Annual trade shows in Asia, Germany and elsewhere are another place to spot new trends. Punirunes – digital, interactive pets that also come in plush varieties – are big in Japan right now and will likely take off in the U.S., toy store owner Derr said.

“Here, I can’t give them away. They’re too new. But give it a year or two,” he said.

Companies can kick off their own trends too. Build-A-Bear’s Spring Green Frog, introduced in 2020, was an immediate hit thanks to videos posted by customers. It remains popular, with nearly 2 million sold, John said.

John suspects people are drawn to friendly, slow-moving capybaras because watching videos of them are so relaxing. But shoppers who want one need to act fast. A Build-A-Bear holiday capybara with red and green sprinkles on its fur – dubbed a “cookiebara” – has already sold out, she said.

___

Durbin reported from Detroit. Crawford reported from Lake Zurich, Ill.



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Government shutdown looking more likely after spending bill tanked

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Government shutdown looking more likely after spending bill tanked – CBS News


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Congress looks poised to shut down the government after House Republicans, spurred on by Elon Musk and President-elect Donald Trump, derailed a spending bill that would have kept the government funded. Nancy Cook, senior national political correspondent for Bloomberg News, joined CBS News to discuss the latest news from Capitol Hill.

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Trump shakes up spending talks with call on Congress to eliminate debt ceiling

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In a move that has stunned Washington, President-elect Donald Trump is now urging Congress to eliminate the debt ceiling, dramatically shaking up talks among lawmakers, who are at an impasse over federal spending and government funding, which is scheduled to lapse this weekend. 

While some on Capitol Hill have balked at Trump’s latest demand, the president-elect was unwavering on Thursday. He said he is determined to hold his position that lawmakers should both oppose any sweeping spending measure that includes “traps” from Democrats and abolish the debt limit before he takes office next year.

“Number one, the debt ceiling should be thrown out entirely,” Trump said in a phone interview. “Number two, a lot of the different things they thought they’d receive [in a recently proposed spending deal] are now going to be thrown out, 100%. And we’ll see what happens. We’ll see whether or not we have a closure during the Biden administration. But if it’s going to take place, it’s going to take place during Biden, not during Trump.”

Trump’s comments, which have sent negotiators in both parties back to the drawing board ahead of the expiration of government funding at 12:01 a.m. on Saturday, came a day after he called a bipartisan spending deal “ridiculous and extraordinarily expensive” and said that any legislation to extend the federal government’s funding should also include plans for “terminating or extending” the debt limit. 

Still, Trump, who built a decades-long business career as a negotiator and dealmaker, appeared to leave room for House Speaker Mike Johnson and other top Republicans to find consensus on new options that he would find sufficient. 

When asked how he would like to see this standoff end, Trump replied, “It’s going to end in a number of ways that would be very good.”

Trump said the discussions are ongoing and it is too soon for him to spell out more details on what the contours of a final agreement should be.

“We’ll see,” Trump said. “It’s too early.”

But Trump said he will continue to closely track how Democrats might seek to influence any revised deal and voiced displeasure at how the initial bipartisan deal had Democratic provisions.

“We caught them trying to lay traps. And I wasn’t going to stand for it,” he said. “There are not going to be any traps by the radical left, crazy Democrats.”

Tesla CEO Elon Musk, a billionaire who spent almost $300 million to back Trump and other Republican candidates in the November elections, also opposed the initial bipartisan spending deal, which he called “terrible.” When Johnson scrapped it, Musk wrote on X, “The voice of the people has triumphed!”

Trump’s focus on the debt ceiling, which caps the federal government’s borrowing authority, comes as he faces a showdown over the issue during the first year of his upcoming term. That prospect, several people close to Trump say, has drawn his attention because he wants to spend his time and political capital next year on other issues and would prefer Congress addresses it now. 

While the current cap on federal borrowing is suspended until Jan. 1, 2025, the Treasury Department would be able to take steps to avoid default for a few months into next year. Nevertheless, the government could face an economically fraught default sometime early next year should the debt ceiling not be extended or addressed by Congress. 

When asked Thursday about Trump’s call to address the debt limit, Rep. Hakeem Jeffries of New York, the House Democratic leader, said, “the debt-limit issue and discussion is premature at best.”



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