CHARLOTTE, N.C. — Using a credit card is more expensive than ever and could get worse, as experts say having a credit card balance could soon cost even more.
The Wall Street Journal reports the average credit card interest rate is about 21%. That's the highest since 1994, and according to a TransUnion report, the average American has a $6,300 balance.
Part of the reason interest rates are so high is to combat a new cap on late fees. The Consumer Financial Protection Bureau finalized an $8 cap on late payments, so banks are raising rates to offset that cap. The CFPB estimates the rule would save American families $10 billion a year in fees paid by those behind their bills.
For now, that $8 limit is tied up in court after issuers sued the bureau, claiming the cap would affect their revenue. Financial experts expect a clearer look at future rates by the middle of October.
RELATED: Federal Reserve poised to cut interest rates, potentially dropping by up to 0.5%, experts say
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