There is no record of a higher average rate being recorded since 1996 as the average rate on Wednesday is the highest on record since 1996
"Jerome Powell has made it clear that the Fed won't be done raising rates anytime soon," Ted Rossman, a senior industry analyst at Bankrate.com, said.
According to Fed Chairman Jerome Powell, the Fed will continue to take steps to bring scorching hot inflation back closer to its 2% goal, bringing "some pain to households and businesses."
Rossman said most credit cards track the Prime Rate, which is three percentage points higher than the federal funds rate. The Fed's actions directly affect credit cardholders."
During June and July, the Fed raised interest rates by 75 basis points. The Fed is expected to hike rates another 75 basis points later in September, according to CME Group's FedWatch tool.
"Most cardholders are now facing 225 basis points higher rates than six months ago as a result of rate hikes." Rossman added that rate hikes have a "significant cumulative effect."
Rossman suggests paying way more than the minimum each month to avoid paying more on your credit card balance.
Rossman advised, "Pay it all if you can.". "If that's not possible, seek out the lowest interest rates possible. There are 0% balance transfer offers that last up to 21 months."
U.S. households' credit card debt increased by 13% on an annualized basis in the second quarter of 2022, according to the Federal Reserve Bank of New York. That's the steepest increase since 1999.