Expect higher credit card interest rates

For roughly a decade, millions of consumers could afford to focus on the rewards and ignore the rates on their credit cards.

Game over. Get ready for higher rates on your credit cards after more rounds of Fed rate hikes this year and next. Many consumers may not realize it but the interest rates on credit cards aren’t fixed. Most credit cards have what are called “variable rates.”

As a result, the interest rate consumers pay on credit card debt typically ticks up each time the Federal Reserve raises rates.

Last week, the Fed raised rates by a quarter-point once again. The target range for the federal funds rate will be 1.75 percent to 2 percent. A rate hike by the Fed translates into a higher prime rate.

As a result, consumers can expect higher rates on credit cards, home equity lines of credit and other adjustablerate loans.

If you don’t pay off your credit card every month, you’re looking at slightly higher monthly minimums and higher annual percentage rate on the credit card balance.

In many cases, higher interest rates can hit in the first billing period after a change in the prime rate. Bank poli- cies vary; some can change quarterly.

The price tag for the latest Fed rate hike will be an extra $1.6 billion this year alone for consumers who are carrying debt on their credit cards, according to an analysis by WalletHub.

And that’s the added cost of just one rate hike. Many economists expect two more rate hikes in 2018. And many are forecasting another three rate hikes in 2019.