Over the past few months, the Federal Reserve has repeatedly cut rates. Since these short-term rate cuts directly impact the prime rate, it seems like everyone that carries a credit card balance should benefit. Right?
Well… As it turns out, some card issuers have actually increased rates over the past few months. In fact, the base interest rate on the Chase Freedom has jumped from 14% to 16% over the past six months, and the rate on the Amex Blue Card has increased 0.5% over the same time period.
So what’s the deal? Given the huge mortgage losses that many banks have been suffering, some of them have decided to insulate their bottom line by attempting to increase the profitability of their credit card divisions.