What has been the growth of interest rates during the summer in the US and how does it affect you?

The Federal Reserve held interest rates steady at 5%-5.25% during their June meeting following an aggressive campaign of rate hikes intended to control rising inflation. However, they are expected to announce more increases before the year ends, including one during their July meeting.

Federal Reserve rate hikes and your credit card bill

Although the Fed held off on a hike in June, credit cardholders may have had their bills affected after the May increase. The 0.25 percentage point interest rate hike is likely to have caused higher bills since it was announced then.

The 25 basis points rate hike by the Fed may have caused a 0.25% increase in your credit card interest rate. This means that if your interest rate was 15.25%, it may have increased to 15.50%, for example.

Chief credit analyst at LendingTree Matt Schulz said it could take one to two billing cycles for consumers to feel the effects on their credit card annual percentage rate, per CNBC. This means that if you carry a balance month to month, your credit card bills could have gone up beginning spring and into summer.

Federal Reserve rate hikes and deposit accounts

Interest rate hikes spell bad news for borrowers, but they can benefit those with savings accounts. This stems from the fact that the fed funds rate is also the basis for the annual percentage yields of deposit accounts. So when the Fed hikes its rates, banks also raise the amount you can earn from your deposit accounts, including savings, checking, and money market accounts, as well as certificates of deposit.