Effect Of Impending Interest Rate Increases

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Walmart
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Effect Of Impending Interest Rate Increases

Postby Walmart » Tue Dec 01, 2015 7:33 am

The FOMC is meeting in two weeks and it's likely it will begin a program of increases in the Fed Funds rate.

How will a program of increases affect CC interest rates, promotional BT rates and BT charges? Has anyone given that much thought?


yfan
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Re: Effect Of Impending Interest Rate Increases

Postby yfan » Tue Dec 01, 2015 1:21 pm

Walmart wrote:The FOMC is meeting in two weeks and it's likely it will begin a program of increases in the Fed Funds rate.

How will a program of increases affect CC interest rates, promotional BT rates and BT charges? Has anyone given that much thought?

It was bound to happen. The Funds rate wasn't going to stay basically at zero forever.

CC interest rate: not interested (pun intended). If I'm paying interest on a credit card, I'm doing it wrong.

BT rates/charges: 0% offers will still be around. These are not so much a reflection of the price of money but a vehicle for a bank to get people to use their card and earn swipe fees and (eventually) interest.

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Vattené
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Re: Effect Of Impending Interest Rate Increases

Postby Vattené » Tue Dec 01, 2015 4:37 pm

yfan wrote:It was bound to happen. The Funds rate wasn't going to stay basically at zero forever.

CC interest rate: not interested (pun intended). If I'm paying interest on a credit card, I'm doing it wrong.

BT rates/charges: 0% offers will still be around. These are not so much a reflection of the price of money but a vehicle for a bank to get people to use their card and earn swipe fees and (eventually) interest.

+1

BT terms are largely marketing, as are intro 0% purchase APRs. I'd expect regular credit card interest rates to go up generally just to keep in line with the overall environment, but there are also other factors at play, such as whether the card in question earns rewards, the applicant's creditworthiness, etc.
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takeshi
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Re: Effect Of Impending Interest Rate Increases

Postby takeshi » Wed Dec 02, 2015 7:35 am

yfan wrote:CC interest rate: not interested (pun intended). If I'm paying interest on a credit card, I'm doing it wrong.

Same here. While I do request APR reductions and have a couple of low APR cards the goal is to avoid paying interest. Since rewards are my focus any interest will kill rewards.

4ktvs
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Re: Effect Of Impending Interest Rate Increases

Postby 4ktvs » Fri Dec 04, 2015 5:01 pm

It will have no effect at all that is of meaning. The rate now is %0-.25, all they are going to do is push the bracket up to %0.25-0.5.

All it will do is force the lowest market interest rate to be at lest %0.25 instead of %0 but it's already closer to %0.25 than %0 as is so this really isn't going to do much.

If they start to rise it to something over %1 then we can talk about effects on what that would do but this is really a whole lot of nothing that should have happened a long time ago. I think 2016 is going to be much like 2015 when it comes to real world interest rates a new world economic crisis happens like 2008.



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