For its part, the Fed has already hiked its benchmark fund rate eight times over the last year to its current level of between 4.5% and 4.75%.
The federal funds rate, which is set by the central bank, is the interest rate at which banks borrow and lend to one another overnight. But Fed rates also influence consumers’ borrowing costs, either directly or indirectly, including their credit card, mortgage and auto loan rates.
Since most credit cards have a variable interest rate, there’s a direct connection to the Fed’s benchmark. As the federal funds rate rises, the prime rate does, too, and credit card rates follow…