The recent increase in Annual Percentage Rates (APRs) for credit cards can be attributed to new regulations from the Consumer Financial Protection Bureau (CFPB) that limit late fees. Major credit card issuers, such as Synchrony and Bread Financial, are responding to these changes by raising APRs to mitigate potential losses from borrowers who may default or make late payments. Experts like Greg McBride from Bankrate.com highlight that while reducing late fees may seem consumer-friendly, it often leads to higher interest rates as issuers seek to balance their risk. Consumers should be aware that only those who carry a balance month-to-month will experience the impact of these higher rates. Existing balances are generally unaffected unless the cardholder becomes delinquent. With credit card debt at an all-time high and delinquency rates rising, understanding these changes is crucial for consumers to manage their finances effectively.
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