Rising credit card interest rates are pushing Americans deeper into a long-term debt trap.
Americans now owe $1 trillion in credit card debt, with an average monthly balance of about $9,600 for borrowers who don’t pay their cards in full each month.
A year ago, a credit card holder making only minimum payments shelled out about $1,185 in annual interest, on average, said Ben Woolsey ofCreditCards.com.
After three quarter-point hikes by the Federal Reserve — a cost that banks pass on almost immediately to card holders — credit card borrowers are now forking over $1,254, or $69 more a year, in interest, on average.
Two more rate hikes are on the table for 2017, which would bring the total to $1,301, or $116 a year in interest.