Rewards Cards APR’s Soar

Rates on all credit cards continue to move higher with each quarter-point rate hike from the Federal Reserve. But rewards credit cards are getting hit particularly hard, with APR’s soaring as much as five full percentage points or more in a single rate jump.

Higher minimum payments (mandated by the government) along with ever stiffer competition to provide the most compelling rewards for consumers have really stifled card issuer profits. In response, card issuers have raised rates significantly on certain reward credit card offerings. So cardholders beware of reward credit card finance charges…

Our advice … pay off your reward card balance quickly and don’t use your rewards cards for new purchases unless you’re absolutely sure you can pay off the new purchase immediately.