Statement Regarding Future Outlook of Credit Card Rates After Credit Downgrade:
Fitch Ratings has recently announced that they are reaffirming the United States AAA credit status, depsite the S&P’s recent downgrade. This news will likely be met with much relief from investors after the recent credit rating fiasco.
The stock market took a particularly tough hit after the news of S&P’s downgrade rippled through the markets. With the economy already struggling to fully recover from the latest recession, this reaffirmation of AAA status is definitely good news.
But even with this recent good news, The downgrade to a lower “AA+” status from S&P (down from the better AAA standard), may mean continued low interest rates for investors hoping to earn interest income in savings accounts, while also potentially raising credit card rates for consumers in the future. But so far, rates do not appear to be increasing at this time.
The Federal Reserve has made an official statement that it plans to keep rates low for at least the next two years. This may prevent rapid increases in credit card rates for the short term. This is especially true for those with variable interest rates. If the prime rate is increased, however, you can expect that credit card rate increases will soon follow.