The Fed’s Rate Increase Affects Your Credit Card Debt

The Federal Funds Rate Has Increased

The Federal Reserve (the Fed) has increased the federal fund rate by 25 basis points this week.

It’s worth noting that the Fed’s decisions on interest rates are based on a variety of economic indicators, such as inflation, employment, and GDP growth. These indicators help the Fed assess the overall health of the economy and determine whether to raise or lower interest rates.

How Does the Fed’s Rate Affect my Credit Card Debt?

The federal funds rate has an important influence on many other interest rates, such as those for consumer loans, mortgages, and credit cards.

Changes in the Federal Reserve’s federal funds rate can have an impact on credit card debt, particularly in terms of the cost of carrying a balance on a credit card.

Most credit cards have variable interest rates that are tied to the prime rate, which is the interest rate that banks charge their most creditworthy customers. The prime rate, in turn, is influenced by changes in the federal funds rate.

When the Federal Reserve raises interest rates, the prime rate tends to increase as well, which can result in higher credit card interest rates. This means that consumers who carry a balance on their credit cards will face higher interest charges, making it more expensive for them to repay their debt.


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Personal Loans

There are a few benefits to getting personal loans. They don’t require any collateral as personal loans are unsecured loans.

Credit Score

Personal loans can improve your credit score when you use them to consolidate your debt or pay your high interest credit cards.

Interest Rate

Personal loans have lower interest rates than credit cards.

Personal Loan Term

You can choose your preferred term limit for loan repayment. It can vary from a few months to years.


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Business Expenses That Can Be deducted On Schedule C

The IRS indicates that a business expense is deductible if it is ordinary, necessary and directly related to running a business.

The following categories are included on the Schedule C, IRS form, used by sole proprietors to report their income:

  • Advertising
  • Car and truck expenses
  • Commissions and fees, contract labor
  • Depletion
  • Depreciation and section 179 expense deduction
  • Employee benefit programs
  • Insurance, interest
  • Legal and professional services
  • Office expense
  • Pension and profit-sharing plans
  • Rent or lease
  • Repairs and maintenance
  • Supplies
  • Taxes and licenses
  • Travel and meals
  • Utilities
  • Wages

Additionally, the following expenses fall under the 20 categories from Schedule C and are deductible:

  • Utility Expenses for Small Business Owners
  • Rent or Mortgage Payments
  • Home Office Costs
  • Website and Software Expenses
  • Business Licenses and Permits
  • Bank Fees and Interest Payments
  • Professional Fees and Business Services
  • Entertainment Expenses
  • Business Meals and Travel Expenses
  • Furniture, equipment and machinery deductions
  • Office Supply Expenses
  • Marketing and Advertising
  • Membership Fees
  • Auto and Vehicle Expenses for Business
  • Business and Health Insurance Premiums
  • Payroll
  • Local and State, Property, Payroll Taxes
  • Employee benefits
  • Training and education