NEW YORK—The amount of money that U.S. consumers pay yearly in credit card fees and interest has passed the $100-billion mark, new research shows.
MagnifyMoney updated its statistics on credit card debt in America to illustrate how much consumers are now taking on. Among the findings:
- Americans paid banks $104 billion in credit card interest and fees in 2018, up 11% from the prior year, and up 35% over the last five years, as Fed rate increases have been passed on to consumers. MagnifyMoney analyzed FDIC data through March, 2018 for each bank whose deposits are insured by the FDIC.
- Average APRs on credit card accounts assessed interest are now 15.5%, up nearly 300 basis points in five years, according to the Federal Reserve.
“With more Fed rate hikes to come this year, we estimate the increase in interest and fees paid in the coming year will once again be above 10%, putting Americans on track to pay over $110 billion,” Magnify Money said. “Our analysis of the impact of Fed rate hikes found credit card rates are the most sensitive to Fed rate hikes, rising more than twice as fast as mortgage rates.”