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Thoughts on the Fed's recent 0.25% APR increase for variable-rate credit cards?

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Valued Contributor

Re: Thoughts on the Fed's recent 0.25% APR increase for variable-rate credit cards?


@CreditCuriousity wrote:

Hoping for a 1% increase by end of next year.. Rates have been way to low for to long.  I don't carry balances.  I feel bad for the retirees and such that havent made jack off their savings for how many years now?  Just my 2 cents.  1% is nothing in the CC grand scheme of things, other things it will impact possibly more, but still believe rates need to increase 1% by end of next year and hopefully a bit more after that.


Yes, I think the current trend in retirement invesment advice is that retirees shouldn't shift comleted over to savings or fixed income once they retire.  People are living a lot longer (I think the average 65 year-old will live 20+ years), so if your investment horizon is 20+ years, you need to stay in the market to keep up with inflation.  You definitely want to reduce risk as you get closer to or ender retirement, but if you stash it all in savings you end up with the opposite risk, that your money won't keep up with inflation.

Message 11 of 16
Senior Contributor

Re: Thoughts on the Fed's recent 0.25% APR increase for variable-rate credit cards?

Galahad15 I totally thought of you the moment I saw this news.  It was very upsetting.  I know for some people its not a big deal but for us it sure is!  Of course we don't pay much interest, or much in the form of fees.  Its just the point that we have it there, should we need it.


After recently being approved for a small bank visa card at 7.5% I certainly hope they get it switched over to fixed from variable before the end of this year or next....sigh....

 

I was only aware of the 0.25% increase starting Jan 1.  So they are saying now they may potentially do another 3 more MID YEAR????  Has that ever happened that the rate is hiked mid year??????

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Message 12 of 16
Valued Member

Re: Thoughts on the Fed's recent 0.25% APR increase for variable-rate credit cards?


@jfriend33 wrote:

 

 

I was only aware of the 0.25% increase starting Jan 1.  So they are saying now they may potentially do another 3 more MID YEAR????  Has that ever happened that the rate is hiked mid year??????


All the time. The FOMC meets every 6 weeks to decide if they should adjust the fed funds rate. 

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Message 13 of 16
Senior Contributor

Re: Thoughts on the Fed's recent 0.25% APR increase for variable-rate credit cards?

Thanks for the information galahad15.

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Message 14 of 16
Valued Contributor

Re: Thoughts on the Fed's recent 0.25% APR increase for variable-rate credit cards?


@jfriend33 wrote:

Galahad15 I totally thought of you the moment I saw this news.  It was very upsetting.  I know for some people its not a big deal but for us it sure is!  Of course we don't pay much interest, or much in the form of fees.  Its just the point that we have it there, should we need it.


After recently being approved for a small bank visa card at 7.5% I certainly hope they get it switched over to fixed from variable before the end of this year or next....sigh....

 

I was only aware of the 0.25% increase starting Jan 1.  So they are saying now they may potentially do another 3 more MID YEAR????  Has that ever happened that the rate is hiked mid year??????


Hi there jfriend, best of luck and all kind wishes, for you to be able to get your currently-variable 7.5% card switched to a fixed rate, before the next rate hike.

 

As far as I am aware, b/c the Fed didn't increase rates as much as originally planned earlier this year, now that the economy has picked up, they want to raise rates faster to prevent the economy from overheating, and to keep inflation in check.  I had heard that they may consider another rate increase this upcoming Jan., plus up to 2 more rake hites before the end of 2017, although they didn't specify when the Fed would meet of the rate hike decision for the other 2 expected hikes.

 

ETA:  accidental typo corrections

Message 15 of 16
Mega Contributor

Re: Thoughts on the Fed's recent 0.25% APR increase for variable-rate credit cards?


@RentSeeking wrote:

@jfriend33 wrote:

 

 

I was only aware of the 0.25% increase starting Jan 1.  So they are saying now they may potentially do another 3 more MID YEAR????  Has that ever happened that the rate is hiked mid year??????


All the time. The FOMC meets every 6 weeks to decide if they should adjust the fed funds rate. 


https://www.thebalance.com/fed-funds-rate-history-highs-lows-3306135 towards the end lists rate changes over the last many years.    In 1980 for example, the rate changed 6 times.  

 

And just to remind how low we are historically:

 

Interest Rate in the United States averaged 5.83 percent from 1971 until 2016, reaching an all time high of 20 percent in March of 1980 and a record low of 0.25 percent in December of 2008.

 

Message 16 of 16
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