Fed Rate Hike Hits Travel Credit Card Balances

The Federal Reserve's recent rate hike may have little impact on travelers planning their next trip, but it could significantly increase the cost of carrying a balance on a travel credit card.

The Fed raised its benchmark rate by a quarter point to 3.75% to 4.00%, affecting variable annual percentage rates (APRs) that often accompany travel cards and airline cards.

LendingTree notes these categories have the highest APRs of any unsecured credit card, with rates as high as 23.72% for travel cards and 24.03% for airline cards.

According to Jimmy Yoon, head of points intelligence at point.me, interest is a 'trap' for travelers who don't pay their balance in full each month.