How a Fed move hits credit cards

A typical card APR is not a 30-year promise. It is a variable rate written as “prime plus a margin.” Prime is a public bank rate. When the FOMC lifts the funds-rate target by 25 basis points, prime almost always rises 25 basis points within a day. Your APR follows on the cycle the agreement names — often the next statement, sometimes the one after.

As of September 16, 2026 the funds-rate target is 3.75%–4%, 25 basis points higher than the previous range. If your card is prime-plus, expect the APR line to tick up by about that much unless you are in a fixed intro period.

What 25 basis points costs on a revolving balance

Interest for a month is roughly balance × APR / 12. On $6,500 at 21.50%, that is about $116. On 21.75%, about $118. The hike is a couple of dollars a month at that balance — easy to shrug off, expensive if the balance sits for years.

The cost that actually hurts is not the 25 basis points. It is revolving at 21% at all. Minimum payments are designed to keep you there. The payoff calculator shows the calendar if you instead send a fixed dollar amount.

Intro APRs and penalty APRs

A 0% purchase or transfer window does not move with the Fed until it expires. Read the go-to rate. That is the prime-plus number waiting at the end.

Penalty APRs — the 29.99%-class rate after a late payment — are a separate contract term. A funds-rate hike does not create them. Missing a payment does.

Why we do not print “the” card APR

The Fed’s G.19 consumer-credit release reports commercial-bank card rates as a survey average, updated with a lag, and it mixes accounts that revolve with accounts that do not. Your statement is the source of record. Type that number into the calculator.

Policy source: FOMC statement, September 16, 2026. Card math is APR/12 compounding, not a lender quote.