This isn’t suprising, but it’s annoying.
U.S. banks keep raising credit card rates, increasing their profit even though they’ve enjoyed steep discounts on their own borrowing, courtesy of Uncle Sam.
CNNMoney.com: The Pew Safe Credit Cards Project said Monday the median lowest advertised credit card rate rose to 11.99% in July from 9.99% in December. At the same time, the group said, the profit banks made on credit card debt rose 46%.
…The study said the rate banks charge on credit card loans on top of what it costs to borrow from the Federal Reserve rose to 8.74% in July from 5.99% in December. That came as banks’ borrowing costs were cut in the wake of the Fed slashing its benchmark interest rate to a range near zero per cent.
The real issue is that on Thursday, Obama’s new credit card rules go into force. These rules limit the card companies’ ability to unilaterally raise rates. So naturally the play is to pass along hikes while they still can. Problem not solved.
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