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Interest hike should
hit about the same time as holiday bills
By Libby
Wells • Bankrate.com
 Thanks
to the Federal Reserve, credit card customers can expect to see
an interest rate hike soon, just as the holiday bills start to roll
in.
The Fed's Nov. 16 decision to raise the federal
funds rate and the federal discount rate by 25 basis points prompted
a jump in the prime rate from 8.25 to 8.50 percent.
The increase will affect credit cards with variable
rates, which is estimated to be about 70 percent of all cards. Consumers
whose issuer adjusts rates monthly could see the increase in their
December bills. This includes Discover, Chase Manhattan and Capital
One, among others.
Lenders such as Citibank, B
ank
of America, MBNA and BankOne/First USA adjust rates quarterly, which
means their customers will get increases in January.
As of Dec. 8, a standard, variable-rate card
averaged 15.88 percent, according to Bankrate.com research,
compared with an average of 13.71 percent on a fixed-rate card.
To find the best rates, go to Bankrate.com's
credit
card search engine.
-- Posted: Dec. 13, 1999
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