topic Re: CC Interest Rate + Federal Rate in General Credit Topics

CC Interest Rate + Federal Rate

creditconcept — Sun, 24 Jan 2016 22:09:28 GMT

I checked my credit card statements today and saw that all my interest rates have increased by 0.25% (Which just so happens to be the same amount the Fed increased their rates by)

Interisgtnly enough, I checked my saving account statement today and noticed my interest rate went DOWN from 0.1% --> 0.05%

Re: CC Interest Rate + Federal Rate

youdontkillmoney — Sun, 24 Jan 2016 23:47:24 GMT

@creditconcept wrote:
I checked my credit card statements today and saw that all my interest rates have increased by 0.25% (Which just so happens to be the same amount the Fed increased their rates by)

Interisgtnly enough, I checked my saving account statement today and noticed my interest rate went DOWN from 0.1% --> 0.05%

^^^

Banks are doing it right as a for profit business: minimize costs (interest to you) and maximize revenues (interest fees to you); interest is income to the lender and cost to the borrower..interest is the price of money.

So the banks profit = revenues - costs

more revenues and less costs = higher prifits.

Good for the bank if you own a share of it.

Re: CC Interest Rate + Federal Rate

iv — Mon, 25 Jan 2016 04:40:43 GMT

@creditconcept wrote:
I checked my credit card statements today and saw that all my interest rates have increased by 0.25% (Which just so happens to be the same amount the Fed increased their rates by)

You do realize it doesn't "just happen" to match the Fed rate increase, right?

Most credit cards (and many loan products) have rates defined as "prime rate plus x.xx%".

Yeah, prime had been 0% for years... but as it starts to climb again, lending rates will adjust to match.

@creditconcept wrote:

Interisgtnly enough, I checked my saving account statement today and noticed my interest rate went DOWN from 0.1% --> 0.05%

Get a better savings account! (Getting at least 1% isn't hard today.)

But yeah, your saving account rate is not pinned to the prime rate.

Re: CC Interest Rate + Federal Rate

takeshi74 — Mon, 25 Jan 2016 13:31:38 GMT

@iv wrote:
You do realize it doesn't "just happen" to match the Fed rate increase, right?

Most credit cards (and many loan products) have rates defined as "prime rate plus x.xx%".

+1 and don't overlook prior discussions as a resource. There have been many threads on the rate increases since the Fed increase.

Your terms should have information on this. Don't overlook that stuff they include with the card. It's not just packing material.