Interest rates are lowering in all areas except one: credit cards.
According to a recent report from the Wall Street Journal, consumers with no credit histories or poor credit scores saw the biggest increases from banks. Rates on “secured cards,” which require borrowers to pay a security deposit in order to get a line of credit, now average about 19 percent, up from 17.7 percent in the first quarter.
This is compounded by merchants who are now are pushing for the right to charge customers extra for credit card purchases. You already indirectly pay to use credit cards – every time you swipe your card for a purchase, the the merchant pays a transaction fee and this fee is passed along to you.
There several national chains that have wanted to charge credit card users extra and reports show that it’s likely they’ll be able to start charging extra (this could happen sometime between now and September).
Odds are that you won’t stop using your credit cards because they are easy and they provide a quick means to make large purchases, as well as providing incentives and benefits. However, credit cards still present more risk than most other types of loans. This is part of the reason for the interest rate increases. The other is that banks and other lenders have been offering more credit cards to riskier borrowers since 2011.