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Credit Card Rates Remain High, Even After Interest Rate Cuts

Americans’ credit card debt has hit a record high, the Federal Reserve of New York said in a report released this week.

Credit card debt climbed $24 billion over a three-month stretch ending in September, soaring to a level 8% higher than where it stood a year ago, the report said.

Debt holders may seek solace in a string of recent interest rate cuts at the Federal Reserve, which typically reduce borrowing rates for credit cards. But credit card interest rates have proven stubborn, leaving borrowers saddled with near record-high average payments even after the rate cuts.

The average credit card interest rate stands at 20.35%, just slightly below a record-high of 20.79% attained in August before the Fed began cutting rates, Bankrate data showed.

Credit card interest rates remain high, in part, because the Fed’s benchmark rate still stands at a historically high level, experts told ABC News.

The incremental cuts in recent months have only partially reversed the previous escalation of rates meant to fight the nation’s worst bout of inflation in decades.

Read more here form ABC News.

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