Do you know the interest rate on your credit cards? If you don’t, you’re not alone. Some 40 percent of Americans with credit card debt do not know what interest rate they are paying on that debt, according to a new Bankrate report.
“As much as we have heard about record-low rates on other products, credit card rates are already high and are probably heading higher,” said Ted Rossman, senior industry analyst at Bankrate and CreditCards.com, in a CNBC report.
The average credit card rate is 16.3 percent, according to Bankrate. But expect that to rise to an average of 17 percent by the end of 2022 after the Federal Reserve raises interest rates, Rossman said.
If you have bad credit, you’ll pay even more. Roughly 25 percent of credit card borrowers pay an annual percentage rate (APR) between 20 percent and 29 percent, according to LendingTree. And 9 percent had an APR higher than 30 percent.
You can call your credit card company and request a lower interest rate. If you are in good standing with them, they might drop it.
Knowing the interest rate on your credit card debt is essential, especially if you carry a high balance, which is true for many Americans — one in three overspent during the holidays.
About a third of consumers were more than $1,000 in debt, according to a report by WalletHub.
Despite Americans having high credit card debt, balances carried from month to month are down significantly — almost 14 percent — from a year earlier, falling to $357 billion as of September 2021, according to NerdWallet’s annual look at credit card and other forms of household debt.
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