The cost of existing credit card debt continues to rise as the Federal Reserve has increased interest rates this year—so far, by $4.9 billion, according to a recent WalletHub survey.
Most signs point to the Federal Reserve increasing its target rate on June 15, and the expected 50-basis point increase would cost credit card users roughly $3.2 billion this year, according to the study. When rate hikes from March, May and June are factored, credit card users will pay around $8.1 billion more in 2022 than they would have otherwise. WalletHub’s analysts don’t expect much of a change in mortgage rates following an upcoming hike because mortgage markets have already accounted for the move, they noted. This already has increased the cost of new mortgages by around 21 basis points, which translates to roughly $20,520, assuming an average home loan of $433,200.
About 50% of people plan to spend less money due to rate increases, according WalletHub’s survey findings, and 70% are concerned that the Fed might be raising rates too fast. About two-thirds feel that the Fed should stop increasing interest rates.