For many types of debt, interest rates are currently rather low. One type of debt that this isn’t the case for is credit card debt. This can be seen in some credit card rate data that recently came out.
The data is from CardHub. According to this financial research firm, individuals with fair credit currently have an average credit card interest rate of around 21 percent, which is a fairly significant increase from last year. The average rates are lower for individuals with good credit (around 17.4 percent) and excellent credit (around 13 percent). The current average rates for individuals with good and excellent credit are higher than the rates from a year ago, though not quite to the same extent as is the case for the average rates for individuals with fair credit.
The capping of penalty fees is one of the things that is thought to have contributed to the high interest rates that credit card companies are setting for their cards.
One wonders if such high credit card rates are a momentary blip or if they will become the “new normal.”
High interest rates on credit cards can pose problems for consumers. For example, such high rates can cause a small credit card problem to quickly escalate into a major one.
One thing that it can be very important for individuals to do when they are facing major credit card troubles is to carefully look into the various relief options that are available to them to see which is best suited for them.
One relief option that may be appropriate for a person facing major credit card debt is bankruptcy. In some circumstances, bankruptcy can help a person get out from under an overly burdensome credit card debt obligation and get back on their feet financially.
Source: CBS News, “Many credit card users paying through the nose,” Aimee Picchi, April 21, 2014