Your Money Matters: Americans Face High Credit Card Rates Despite Federal Reserve Cuts

Americans are carrying a record amount of credit card debt, and many likely added more during the holiday season.

Even though the Federal Reserve has started lowering interest rates, those with credit card debt may not feel relief immediately.

Interest rate hikes in 2022 drove the average credit card rate from 19.5% to nearly 25% by September 2024, the highest on record. Now, as the Fed lowers rates and works to curb inflation, progress is expected to be slow.

Matt Schulz from LendingTree compared the process to a change in pace. "After taking the elevator up, they're gonna take the stairs down, so it's going to be a pretty slow process," he said.

Still, there’s hope for those tackling debt. Schulz emphasized that paying off significant amounts of debt is possible with a focused plan.

Here are three key steps to start:

1. Stop the bleeding: Avoid adding new charges to your credit card.
2. Stay consistent: Never miss a payment.
3. Prioritize credit card debt: Pay off high-interest credit card balances before addressing other debts.

While the journey may be slow, small, consistent steps can make a big difference in reducing financial burdens over time.