It's only about 60 times higher than the average interest rates on savings accounts! 

Answer: 20.4%

Questions: 

• What has been the trend over the past two years with interest rates on credit cards?
• Does 20% seem high, low or just about right when it comes to paying interest on credit card debt?
• What is one strategy that you can use to avoid having credit card debt?
  

Here's the ready-to-go slides for this Question of the Day that you can use in your classroom.

Behind the numbers (The Hill): 

Card balances are rising at a time when consumers may find it harder than ever to pay them down. Credit-card interest rates hit 20 percent in late 2022, according to the Federal Reserve, the highest level in nearly 30 years of tracking.

To buy now and pay later is a classic consumer impulse.

“Americans love their credit cards,” said Matt Schulz, chief credit analyst at LendingTree, the consumer finance company. “We always have credit-card debt, and it is almost always rising.”

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Yanely tackled the issue of credit card debt in her recent FinCap Friday: Debt at Record Highs as Interest Rates Rise. 

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 NGPF's Semester Course has a lesson dedicated to credit cards: Young People and Credit Cards (SC4.2) and Using Credit Cards Wisely (4.3) 

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.