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The Federal Reserve once again held interest rates steady at Wednesday's meeting, but that doesn't mean your card's interest rate can't change. There are other things -- like economic uncertainty and the potential impact of tariffs -- that could impact your credit card's APR.
The Federal Open Market Committee left interest rates at a target range of 4.25% to 4.5% (PDF) in response to continued uncertainty about the economy and "somewhat elevated inflation." Chair Jerome Powell said the Fed is responding in real time to ever-changing tariffs, noting that their impact on prices is still unpredictable.
"The July 9 drop-dead date for all the Liberation Day tariffs is still out there and unresolved," he said at the press conference following the FOMC meeting. "One of our jobs is to make sure that a one-time increase in inflation doesn't turn into an inflation problem."
Although the federal funds rate only directly dictates lending between banks, the central bank's monetary adjustments are typically passed on to consumers, affecting financing rates on loans and credit cards.
Borrowing rates for consumers have remained high, despite three interest rate cuts last year. Some experts still expect cuts in September, when the Fed reconvenes after its summer hiatus, but it'll depend on how the economy continues to react to things like tariffs, inflation and unemployment.
Interest rates affect how much it costs to borrow money, including how much you pay in interest for credit card debt. While the Fed's decision may not change your credit card interest rate anytime soon, other factors could.
What is APR?
Your credit card's annual percentage rate, or APR, is the rate at which your card balance accrues interest over the course of a year. Your balance actually accrues interest daily, but the APR is how much your balance will grow annually.
What else affects your credit card APR?
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