Finally, the Federal Reserve looks poised to lower rates at its next FOMC meeting in September.

Cue sighs of relief from credit card users across the country plagued by rising debt balances. Through the current high rate environment — the target federal funds rate sits at 5.25%-5.50%, a more than 20-year high — the cost of their credit card debt has only grown.

Look no further than this snapshot of federal rate data:

Average credit card interest rates increased from around 16% in 2022 to over 21.5% today. Credit card debt balances grew by 5.8% between Q2 2023 and 2024. Total credit card debt surpassed $1 trillion for the first time in 2023. In the past year, 9.1% of credit card accounts became delinquent (30 or more days past due).

But the Fed’s decisions alone may not offer the relief you’re looking for. After all, plenty of factors influence your credit card’s interest rate. Even if the Fed lowers federal interest rates, you shouldn’t wait to begin paying down debt.

https://finance.yahoo.com/personal-finance/fed-rates-cut-credit-cards-221927805.html