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Fed's increasing rates will hurt those with credit card debt

Most Florida residents and others around the county often feel somewhat removed from the decisions made by the Federal Reserve. However, a recent action by the nation's central banking system may have a significant impact on many consumers. It was announced that the Fed was raising the interest rate by a quarter of a percentage point. While this increase sounds rather small, those people carrying credit card debt will feel its effects.

A personal finance website reported that consumers have incurred over $90 billion in new credit card debt in the past year. Declining numbers of charge-offs and defaults have led many lenders to offer credit cards to more consumers. However, the interest rate increase by the Federal Reserve will end up costing consumers more money. As credit card companies follow the Fed's lead and increase their rates, those carrying balances will have to pay more interest.

With more interest being tacked on to the credit card balances, it will take consumers a longer period of time to pay off the full amount. This increase is not likely the only one for this year. Projections are for rates to be raised further several more times throughout 2018 and 2019. Analysts are concerned that debt levels are at an all-time high, with over $1 trillion in credit card debt.

Though there have been recent improvements in the nation's overall economy, there may be some Florida families struggling with credit card debt. To help get finances back on the right track, it would be wise to contact an experienced bankruptcy attorney. A respected lawyer can help clients develop a plan to reduce or eliminate the debt that is best suited to their situation.

Source: marketwatch.com, "For consumers with credit-card debt, Fed rate hike will sting", Anora M. Gaudiano, March 21, 2018

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