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As Fed Rate Hikes Increase Interest, Americans Are Still Accumulating Record Amounts of Credit Card Debt

September 12 — During the second quarter of 2018 alone, consumers racked up $29.8 billion in credit card debt (the fourth-largest Q2 increase ever), according to WalletHub’s Credit Card Debt Study. Moreover, another report from WalletHub, the Fed Rate Hke Report, found that the Fed’s upcoming interest rate hike on Sept. 26 is projected to cost people with credit card debt an extra $1.6 billion in the next year.

Cities with the largest debt increases for the second quarter included Darien, Conn., Lake Forest, Ill., Southlake, Texas, Beverly Hills, Calif., and Dix Hills, N.Y., while those with the smallest debt increases included Clarkston, Ga., Coachella, Calif., Chelsea, Mass., San Luis, Ariz., and Cicero, Ill.

Other highlights from the studies include:

  • 59 percent of people think their credit card interest rates are too high already
  • Fed interest rate increases have cost the average homebuyer roughly $42,000, assuming its seven recent rate hikes are fully responsible for the rise in the average mortgage APR since January 2015
  • 27 percent of people think President Trump know how to grow the economy better than the Federal Reserve
  • 46 percent of people don’t know when the Fed last raised its target rate
  • WalletHub projects ending 2018 with $100 billion more in credit care debt than when the year began
  • Americans already owed more than $1 trillion in credit card debt at the start of 2018, the largest amount on record

For more information, read the full credit card debt and Fed rate hike studies.

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