ST. LOUIS—The Federal Reserve rate hikes are having an uneven effect on different forms of debt.
The hikes have led to a near-record gap between interest rates on personal loans and credit cards, according to the Federal Reserve Bank of St. Louis, Fox Business reported.
The average interest rate on credit cards was 16.27% as of August, while the average interest rate on personal loans was 10.16%, according to the latest data.
“This marks one of the largest gaps between commercial bank interest rates on credit card plans and 24-month personal loans in the St. Louis Fed’s recorded history,” Fox Business said.
The news comes as Americans are holding significant amounts of credit card debt. Credit card balances saw a $46 billion increase in the second quarter of 2022, marking the largest quarterly spike in more than two decades, according to the Federal Reserve Bank of New York.
Fox Business added that half of Americans have fallen behind on their credit card debt, citing a Clever survey.
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