With central bank interest-rate cuts now under way in the United States as well, Americans are largely set to see the cost of their credit-card debt slowly decline. But only a few Canadians are enjoying a similar downward ride.
U.S. credit cards typically have variable interest rates that tend to move up or down along with adjustments in the U.S. Federal Reserve’s benchmark federal funds rate. In Canada, by contrast, the vast majority of credit cards have fixed interest rates.
The difference means that while consumers in both countries have been racking up credit-card debt to help manage higher living costs and other financial headwinds, only in the U.S.
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