The game of political brinkmanship over the debt ceiling isn't just an abstract battle of wills. If it isn't raised, you can expect that your credit card interest rate surely will be.
As Credit.com explains, if the U.S. AAA credit rating goes down, interest rates will rise across the board, including the rate you have to pay on your favorite piece of plastic:
So if the U.S. has to pay more to borrow, the prime rate that banks pay to borrow money to lend out to consumers goes up. And guess what happens when this increase makes it all the way down the food chain to the consumer? The vast majority of credit cards have variable rates and they go up and down with the prime rate. So if the prime rate goes up, your variable rate goes up by the same amount.
More than likely, the debt ceiling will be raised by one method or another just before the deadline. But if it isn't, "open every piece of mail that your credit card issuer sends you," advises Credit.com. It may just contain a nasty notice about your jacked up interest rate. And if that happens, that's just the beginning of our worries.If the Debt Ceiling Isn't Raised, Your Credit Card's Interest Rate Will Be [Credit.com]
4 comments:
While I don't like what's going on, it will not affect us. We paid off all of our credit card debt 6 years ago and now have ZERO.
We will use our card(s) once a month and immediately write a check to pay it off.
Those who are in credit card debt up to their ears should have been more careful and this wouldn't be affecting them either.
Sometimes people are in credit card debt because that's how they survived during a job loss....it's not always carelessness or stupidity.
I agree with 11:01
I have two credit cards, each have perks which is why I have them (plus the convenience of not carrying cash), and I pay them off every month.
To 12:43, I've been unemployed at times for six months, and have never had a credit card debt. It's called "Don't spend money you don't have" -- a lesson Congress needs to learn.
I've had credit cards for nearly 40 years. I've paid interest on a credit card once in my life -- it was in Sept 1977, I paid it off a month later. It was planned and only cost me about $5.
then i guess its time for your idiot teabagger friends in congress to raise the dam thing and stop playing politics with our economy.
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