The FED Raised Interest Rates At Their Last Meeting…How Much Will That Cost Credit Card Revolvers (in Billions)?
Answer (from MarketWatch based on NerdWallet analysis): $1.6 billion
The Federal Reserve raised its target range for federal funds by a quarter percentage point to 0.75%-to-1% on Wednesday, and signaled two more rate increases in 2017. Put another way, this increases how much banks will be charged to borrow money from Federal Reserve banks. (The Fed raises and lowers interest rates in an attempt to control inflation.)
I know some of you are trying to figure out how that decision from the Federal Reserve translates into higher costs for credit card revolvers. Here is the transmission mechanism: