The Federal Reserve has slashed its benchmark rate to 1%, yet many people are getting hit with higher rates and fees on their credit cards.
Normally, when the Fed cuts rates, credit-card issuers follow suit, resulting in lower monthly payments for cardholders. Though average credit-card rates have fallen slightly as the Fed has cut interest rates, banks and retailers are trying to offset rising losses in their credit-card operations by raising rates and fees across a broader swath of their existing customers.
Banks had already been tightening the screws on people with less-than-perfect credit in recent months. Now, even customers who pay their bills on time will find it more expensive to carry a balance.