US credit card interest rates rise to 22%, highest in 12 months

new car loans: New car loans are installment loans used to finance vehicle purchases, commonly offered with fixed terms and rates that reflect market yields, lender conditions, and borrower credit quality. The news reports that the average five-year rate for a new-car loan increased in August, raising financing costs for vehicle buyers. US credit cards: US credit cards are revolving consumer-credit products whose interest rates are generally variable and influenced by lenders’ pricing and benchmark rates. The news reports that the average rate on accounts assessed interest rose in August, making credit-card borrowing more expensive for consumers carrying balances. Consumer impact: Credit-card borrowers who carry balances face higher financing costs than consumers who pay their statements in full, while auto-loan rates affect buyers at the point of vehicle purchase. Borrowing conditions: Recent reporting links higher consumer borrowing costs to elevated bond-market yields, while credit-card rates also reflect lenders’ pricing and benchmark-rate conditions. Federal Reserve data: The Federal Reserve’s latest consumer-credit release confirms that the average rate on credit-card accounts assessed interest reached 22.36% in August and that the average rate on a five-year commercial-bank loan for a new vehicle reached 7.54%.