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Expand chart
Data: St. Louis Federal Reserve; Chart: Axios Visuals

Since 2014, credit card interest rates have risen 4.4 percentage points, representing a 35% increase in costs for consumers, data from NerdWallet shows, despite the fact that U.S. interest rates remain at historical lows.

Context: Though the rate remains historically low, delinquencies are up 22% since 2015.

Why it matters: That adds significantly to the interest costs for consumers who carry credit card debt from month to month, and the average household now pays more than $1,150 a year in credit card interest.

On the bright side: Consumers may get some respite from a Fed rate cut. Credit card rates are legally tied to the so-called prime rate that banks charge their best customers, which is based on the U.S. overnight interest rate set by the Fed.

But, but, but: The Fed funds rate has diverged a bit this year from the prime rate and the credit card rate since the Fed paused its hiking cycle.

  • While the Fed rate hasn't moved since December 2018, the prime rate rose 15 basis points in January to 5.5% and has remained there, and the commercial credit card interest rate has risen 28 basis points to an all-time high of 17.14%.

Between the lines: NerdWallet's data also finds almost half of Americans (47%) do not pay their credit card bill in full each month and 38% of U.S. credit card holders don't know the interest rate on their cards.

Go deeper

Buffett eyes slow U.S. progress, but says "never bet against America"

Warren Buffett in New York City in 2017. Photo: Daniel Zuchnik/WireImage

Warren Buffett called progress in America "slow, uneven and often discouraging," but retained his long-term optimism in the country, in his closely watched annual shareholder letter released Saturday morning.

Why it matters: It breaks months of uncharacteristic silence from the 90-year-old billionaire Berkshire Hathaway CEO — as the fragile economy coped with the pandemic and the U.S. saw a contentious presidential election.

Restaurant software meets the pandemic moment

Illustration: Annelise Capossela/Axios

Food delivery companies have predictably done well during the pandemic. But restaurant software providers are also having a moment as eateries race to handle the avalanche of online orders resulting from severe in-person dining restrictions.

Driving the news: Olo filed last week for an IPO and Toast is rumored to be preparing to do the same very soon.

Bryan Walsh, author of Future
3 hours ago - Technology

How the automation economy can turn human workers into robots

Illustration: Sarah Grillo/Axios

More than outright destroying jobs, automation is changing employment in ways that will weigh on workers.

The big picture: Right now, we should be less worried about robots taking human jobs than people in low-skilled positions being forced to work like robots.

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