Credit Rating

A recent Bankrate survey reveals that 72% of adults with credit card debt are actively pursuing rewards, despite financial experts warning that the interest payments often outweigh the benefits of these rewards.

“It doesn’t make sense to pay 20, 25 or 30% in interest just to earn a few percentage points in cash back or travel rewards,” says Ted Rossman, a senior industry analyst at Bankrate. "Rewards are great, but only if you're able to pay in full and avoid interest each month."

Rep. Anna Paulina Luna, Republican of Florida, and Rep. Alexandria Ocasio-Cortez, Democrat of New York, are teaming up on bipartisan effort to limit interest rates on credit cards.

"For too long, credit card companies have abused working class Americans with absurd interest rates, trapping them in an almost insurmountable amount of debt," Luna wrote on X alongside a photo of herself and Ocasio-Cortez.

"We need a fair solution — and that means getting rid of the status quo and putting a reasonable cap on interest rates."

A Fitch Ratings analyst warned that the U.S. banking industry has inched closer to another source of turbulence — the risk of sweeping rating downgrades on dozens of U.S. banks that could even include the likes of JPMorgan Chase.

The ratings agency cut its assessment of the industry’s health in June, a move that analyst Chris Wolfe said went largely unnoticed because it didn’t trigger downgrades on banks.

Fitch Ratings’ decision to strip the U.S. of its triple-A credit rating last week was widely dismissed as meaningless. After all, Standard & Poor’s had done the same back in 2011 and bond yields declined—implying more, not less, appetite for Treasury debt.

This time, though, bond yields rose. That suggests Fitch’s action deserves our attention, not because it tells us anything new but because it joins the stack of evidence of how profoundly different, and risky, the nation’s fiscal situation is now.

Sen. Joe Manchin (D-W.Va.), who has railed against the nation’s record-high debt, on Thursday called Fitch Ratings’s downgrade of the U.S. credit rating from AAA to AA+ a “historic failure of leadership by both political parties and the executive branch.” 

Manchin, who is flirting with a presidential run as a third-party candidate backed by the group No Labels, has regularly criticized what he views as the lack of bipartisan cooperation in Washington.

A US credit downgrade by Fitch was "entirely unwarranted," Treasury Secretary Janet Yellen said Wednesday, pushing back against the second-ever decrease by a major ratings agency following repeated debt limit standoffs in Washington.

Her remarks came a day after the world's biggest economy lost its top-tier credit rating from Fitch as the agency lowered it a notch from AAA to AA+, drawing fiery disapproval from the White House and Treasury.

Fitch Ratings downgraded the United States’ long-term foreign currency issuer default rating to AA+ from AAA on Tuesday, pointing to “expected fiscal deterioration over the next three years,” an erosion of governance and a growing general debt burden.

“The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management,” said Fitch.

U.S. stock futures opened lower after the rating agency issued its downgrade, with Dow futures sliding about 100 points.

Fitch Ratings on Tuesday downgraded the U.S. government’s credit rating, after a partisan clash over its borrowing authority threatened default earlier this year.

Fitch lowered the U.S. debt rating to AA+ from AAA. The firm cited repeated debt-limit political standoffs, an inadequate fiscal framework and a complex budgeting process.

The announcement, which Fitch had warned might come for months, triggered an immediate rebuke from Biden administration officials including Treasury Secretary Janet Yellen.