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Nearly half of American households have credit card debt and pay more than 20% in interest on their revolving balances.
Even when the Federal Reserve cuts rates, those high APRs don’t fall much.
Credit card interest rates are set in a very competitive market, according to the American Bankers Association.

Americans may feel somewhat removed from the Federal Reserve, but the central bank’s moves have a ripple effect on many types of consumer products, most notably the credit cards in their wallet.
Nearly half of American households have credit card debt and pay more than 20% in interest, on average, on their revolving balances — making credit cards one of the most expensive ways to borrow money.

“For millions of American households, credit card debt represents their highest-cost debt by a wide margin,” said Ted Rossman, senior industry analyst at Bankrate. 
Since most credit cards have a variable rate, there’s a direct connection to the Fed’s benchmark. When the Fed cuts rates, the prime rate lowers, too, and the interest rate on that credit card debt is likely to follow within a billing cycle or two.
And yet, credit card APRs aren’t falling much at all.

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Consumers hoping for “an automatic, proportional drop” in their credit card interest rates “may be disappointed,” according to a new report by CardRatings.com.
When the Fed cut rates in the second half of 2024, lowering its benchmark by a full point by December, the average credit card rate fell by only 0.23% over the same period, CardRatings found.

The central bank lowered its benchmark rate by a quarter point again last month. Yet the average credit card rate in the CardRatings survey was 24.22% for the third quarter, down just 0.09% from the previous quarter.
The correlation between the Fed funds rate and credit card rates is often “weaker” than expected, said Jennifer Doss, CardRatings.com’s executive editor. Credit card rates are also “heavily influenced by credit conditions and individual credit scores,” she said.

‘A highly competitive market’

“If the Fed continues to lower interest rates, consumers will likely see some declines in credit card APRs, but that may take some time and could vary depending on the type of card and individual issuer,” said Jeff Sigmund, a spokesman for the American Bankers Association.
“Credit card interest rates are set in a highly competitive market,” he said.

Generally, card issuers have several ways to mitigate their exposure to borrowers who could fall behind on payments or default. For example, issuers may trim back the lower end of the APR range (what’s charged to more creditworthy borrowers) but not the high end, said Rossman.
For some retail credit cards, APRs are even rising, despite the Fed’s moves, according to a Bankrate survey. Banks that issue store-branded credit cards have said maintaining higher APRs was necessary following a Consumer Financial Protection Bureau rule limiting what the industry can charge in late fees.
But even after bank trade groups succeeded in killing the CFPB rule earlier this year, some credit card companies, including Synchrony and Bread Financial, said they would not roll back the hikes.

Even if your credit card rate were to fall by a full quarter point, in lockstep with the Fed’s latest cut, it might go from 20.12% to 19.87%, Rossman said, “that’s still very high-cost debt.”
At these rates, there isn’t much in the way of relief for consumers. “We’re talking a difference of $1 a month for someone making minimum payments toward the average balance,” Rossman said.
Of course, only consumers who carry a balance from month to month feel the pain of high APRs. 
“The real consumer benefit lies in making your personal credit card rate 0%, either by paying in full — if you can — or signing up for a 0% balance transfer card,” Rossman said of cards offering 12, 15 or even 21 months with no interest on transferred balances.
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A union lawsuit against Trump officials regarding blocked student loan forgiveness is on hold due to the government shutdown.
The stay on the American Federation of Teachers’ legal challenge could further prolong the long wait times borrowers are already facing to access certain income-driven repayment plans and buyback options for Public Service Loan Forgiveness, consumer advocates say.
A law shielding student loan forgiveness from taxation expires at the end of 2025, meaning borrowers who get the relief after that point may be hit with a bill from the IRS.

Workers walk through the crypt of the US Capitol in Washington, DC, US, on Wednesday, Oct. 8, 2025.
Valerie Plesch | Bloomberg | Getty Images

With a union lawsuit against the Trump administration on hold during the government shutdown, borrowers’ wait times for student loan forgiveness may get even longer.
The American Federation of Teachers’ legal challenge against Trump officials will be stayed until Congress restores appropriations to the U.S. Department of Justice, U.S. District Judge Reggie Walton said in an Oct. 4 filing. The government shuttered on Oct. 1 after Democrats and Republicans failed to agree on a spending deal.

In its lawsuit, the AFT accused the U.S. Department of Education of denying federal student loan borrowers their rights to an affordable repayment plan and to the debt forgiveness opportunities mandated in their loan terms.
The stay on the union’s legal challenge could further prolong the long wait times borrowers are already facing, consumer advocates say. What’s more, a law shielding student loan forgiveness from taxation expires at the end of 2025, meaning borrowers who get the relief after that point may be hit with a bill from the IRS.
“We are very concerned that, without judicial intervention, borrowers will not get their cancellation processed this tax year and could potentially incur thousands of dollars of tax liability,” said Persis Yu, deputy executive director and managing counsel at Protect Borrowers, which is serving as AFT’s counsel.

Read more CNBC personal finance coverage

The Education Department requested the stay earlier this month, in part because its Justice Department attorneys are prohibited from working during the government shutdown. The plaintiffs did not oppose the request.
“However, if the shutdown does not resolve before Friday, we reserved the right to request that [the] briefing resume,” Yu said.

The Education Department did not respond to a request for comment on the loan forgiveness actions. A CNBC reporter’s email to a spokesperson at the agency was met with an automated message, saying, “I will respond to emails once government functions resume.”
Here’s what borrowers need to know about the paused lawsuit.

Lawsuit focuses on borrower backlog

The AFT, a union with some 1.8 million members, filed its lawsuit against the Trump administration in March, accusing officials of blocking borrowers from student loan repayment plans mandated by Congress, as well as a popular loan forgiveness program for government and nonprofit workers. In September, the union amended its complaint to seek claaction status.
“Borrowers are unable to access affordable monthly payment plans, some borrowers are being thrust into default on their debt, and some public service workers are being denied their statutory right to lower their monthly payment and earn credit towards Public Service Loan Forgiveness,” the lawsuit said.

As of the end of August, the Education Department had a backlog of 1,076,266 income-driven repayment plan applications, September court records show. That means more than a million people are waiting to get into a new income-driven repayment plan. Those plans cap a borrower’s monthly bill at a share of their income and lead to debt cancellation after a certain period.
Meanwhile, there are more than 74,000 pending applications from borrowers hoping to qualify for the Public Service Loan Forgiveness Buyback program. PSLF offers debt forgiveness to certain public servants after a decade.
“The backlog provides evidence that the U.S. Department of Education is not adequately fulfilling the statutory requirements” to offer those relief programs, higher education expert Mark Kantrowitz told CNBC in September.

Clock is ticking for borrowers to avoid tax bill

AFT said in its lawsuit that many of the borrowers in the backlog may already be due for loan forgiveness, but that if the loan discharges occur after December, those borrowers could face a huge tax bill.
The American Rescue Plan Act of 2021 made student loan forgiveness tax-free at the federal level through the end of 2025. But Trump’s “big beautiful bill” did not extend or make permanent that broader provision.
The tax bill on student loan forgiveness can be substantial.
The average loan balance for borrowers enrolled in an IDR plan is around $57,000, said Kantrowitz.
For those in the 22% tax bracket, having that amount forgiven would trigger a tax burden of more than $12,000, Kantrowitz estimates. Lower earners, or those in the 12% tax bracket, would still owe around $7,000.
The difficulty accessing student loan relief programs comes at a challenging time for borrowers.
More than 5 million people are in default on their federal student loans and another over 4 million are in “late-stage delinquency,” or between 181 and 270 days late on their payments, according to an analysis last month by the Congressional Research Service.
“The effect of the shutdown on student loans is just another blow to college graduates with huge student debt burdens who need access to affordable monthly payment plans,” said AFT President Randi Weingarten. “Each day of delay means more stress, more uncertainty, and more people slipping through the cracks.” More

The U.S. Army on Tuesday launched a program to build micro nuclear reactors.
Investors have speculated heavily on the fortunes of NuScale, Oklo and Nano Nuclear despite the fact that none of the companies have deployed a reactor yet.

Nuclear stocks traded mixed Wednesday after the U.S. Army launched a program to deploy small reactors.
Shares of NuScale, a small reactor developer, surged more than 16%. Oklo and Nano Nuclear fell more than 1% and about 3%, respectively. The uranium company Centrus jumped 10%.

Those stocks all rallied sharply earlier in the session.
The U.S. Army on Tuesday unveiled a program to build micro nuclear reactors in partnership with the Defense Innovation Unit. The microreactors will be commercially owned and operated with the goal of helping developers scale up their businesses, according to the Army.

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NuScale Power (SMR), 1 day

The Army launched the “Janus Program” in response to President Donald Trump’s May executive orders that aim to speed the deployment of advanced reactors. Trump ordered the Defense Department to have a reactor operating at a domestic military installation no later than Sept. 30, 2028.
Investors have speculated heavily on the fortunes of NuScale, Oklo and Nano Nuclear despite the fact that none of the companies have deployed a reactor yet. Oklo and Nano Nuclear have not generated any revenue. NuScale posted $8 million in revenue in the second quarter.

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Oklo (OKLO), 1 year

Artificial intelligence power demand and Trump’s executive orders have fueled a wave of market enthusiasm about nuclear power. Goldman Sachs recently told investors to exercise caution on Oklo. More

A large number of student loan borrowers have not made payments on their loans since fall 2024, when the post-pandemic relief period for past-due borrowers officially ended, according to the Congressional Research Service.
Now millions of student loan borrowers face a so-called “default cliff,” recent reports show.
In a letter sent to U.S. Secretary of Education Linda McMahon and shared exclusively with CNBC, Sen. Elizabeth Warren, D-Mass., said the Education Department should “work with Congress to avert this economic disaster.”

For months, experts have warned that student loan borrowers who are behind on their payments may trigger a “default cliff.” Recent reports show that cliff is now looming.
The resumption of federal student loan delinquency reporting on consumers’ credit earlier this year caused a spike in the rate of severe delinquencies, which now near a record high, according to September’s Credit Insights report from credit score developer FICO. 

Roughly 5.3 million borrowers are in default and another 4.3 million borrowers are in “late-stage delinquency,” or between 181 and 270 days late on their payments, according to a separate analysis last month by the Congressional Research Service based on data from the Education Department. Payments 270 days past due are considered in default.
With so many borrowers already seriously delinquent, “if these borrowers do not start paying soon, defaults will meaningfully rise,” Moody’s Analytics economist Justin Begley told CNBC.  
According to Begley’s projections, “we should expect many borrowers to be pushed into default in coming months.” 

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Another study from May by the Pew Charitable Trusts also found an impending “default cliff” or “a coming wave of further student loan defaults — which put borrower financial stability and taxpayer investments at risk.” Further, borrowers who default are often caught in a cycle of nonpayment that is difficult to get out of, with two-thirds defaulting more than once, an earlier Pew report also found. 
The default cliff many now face is generally the result of a large number of borrowers not having made due payments on their loans since Sept. 30, 2024, when the post-pandemic relief period for past-due borrowers officially ended, according to the Congressional Research Service. Those who have not made payments since then could have entered default as of late June. 

‘Bubble’ of borrowers headed toward default

Higher education expert Mark Kantrowitz said there is currently a “bubble” of borrowers moving through each stage of delinquency.
Many of the borrowers in this bubble were in default before the pandemic and took advantage of the government relief measures to return their loans to “current” status by late 2024, he said. “I expect that these borrowers will default when they become 270 days delinquent, then the delinquency and default rates will return to previous norms.”
Student loan borrowers often fall behind on payments because they can’t afford the monthly expense. However, repayment options that cap monthly payments based on income are dwindling, due to recent court actions and President Donald Trump’s “big beautiful bill.”
The Income-Based Repayment plan, or IBR, is now considered the best alternative for borrowers looking for an affordable repayment option, experts say.

Risk of ‘financial ruin’

In a new letter to the U.S. Department of Education, Sen. Elizabeth Warren, D-Mass., and other lawmakers also warned of a worsening wave of defaults.
Significant staffing cuts at the Education Department and the passage of Trump’s “big beautiful bill” have reduced access to debt relief and made defaults more likely, Warren wrote in the letter sent late Tuesday to U.S. Secretary of Education Linda McMahon and shared exclusively with CNBC.
In the letter, also signed by Senate Minority Leader Chuck Schumer, D-N.Y., Sen. Angela Alsobrooks, D-Md., Sen. Kirsten Gillibrand, D-N.Y. and Rep. Ayanna Pressley, D-Mass., the lawmakers said the “devastating increase in past due payments threatens not only individual borrowers but the broader economy by suppressing consumer spending and locking families out of housing and other financial opportunities.”
The Education Department should “work with Congress to avert this economic disaster,” the lawmakers wrote. The Education Department should clear the backlog of income-driven repayment applications and create an interest-free temporary default prevention forbearance program for borrowers, they wrote.

In an email to CNBC, Warren also said “if the administration fails to act, millions of Americans will be pushed to financial ruin.”
As of the end of August, the Education Department had a backlog of nearly 1.1 million applications from borrowers trying to get into an income-driven repayment, or IDR, plan, according to court records from mid-September.
The Education Department did not respond to an emailed request for comment. “Due to the lapse in appropriations, we are currently in furlough status. We will respond to emails once government functions resume,” an auto-response said.
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The capital gains bracket, levied at 0%, 15% or 20%, applies to profitable assets owned for more than one year, known as long-term capital gains.
For 2026, single filers can earn up to $49,450 in taxable income — or $98,900 for married couples filing jointly — and still pay 0% for long-term capital gains.
If your taxable income falls within the 0% bracket, you could harvest gains or rebalance without triggering a tax bill, experts say.

D3sign | Moment | Getty Images

The IRS has unveiled the capital gains tax brackets for 2026, with higher earnings limits for the 0% rate. That could offer tax planning opportunities for many investors, financial experts say.  
The bigger limit is “pretty incredible, especially in years like this where the market’s been roaring,” said Tommy Lucas, a certified financial planner at Moisand Fitzgerald Tamayo in Orlando, Florida. His firm is ranked No. 69 on CNBC’s Financial Advisor 100 list for 2025. 

Despite recent volatility, the S&P 500 was still up nearly 14% year-to-date as of Tuesday afternoon. The index also soared by more than 23% in 2024.   

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Whether you’re ready to harvest some gains or diversify your taxable portfolio, here’s what to know about the 0% capital gains rate for 2026.

How the 0% capital gains bracket works

The capital gains bracket applies to profitable assets owned for more than one year, known as long-term capital gains. By comparison, investments held for one year or less are short-term, subject to regular income tax rates.  
Your capital gains rate depends on taxable income, which is significantly lower than your gross earnings. Those limits are “more generous” for 2026, based on the IRS adjustment, Lucas said. 
For 2026, single filers can earn up to $49,450 in taxable income — or $98,900 for married couples filing jointly — and still pay 0% for long-term capital gains. By comparison, the 2025 thresholds are $48,350 for single filers and $96,700 for married couples.   

You calculate taxable income by subtracting the greater of the standard or itemized deductions from your adjusted gross income.
For 2026, the standard deduction was also adjusted for inflation. The tax break is $16,100 for single filers and $32,200 for married couples filing jointly.   
However, you need to run projections because any sold profitable assets will increase your taxable income, experts say.  

The 0% bracket provides a ‘significant opportunity’

The 0% capital gains bracket offers a “significant opportunity” for tax planning, CFP Neil Krishnaswamy, president of Krishna Wealth Planning in McKinney, Texas, previously told CNBC.
For example, many investors are eager to rebalance their taxable brokerage accounts, but worry about the tax consequences, experts say. After years of strong stock market performance, “a lot of people have gains in their accounts,” said Lucas. But the 0% bracket could be a chance to rebalance or diversify your brokerage account without triggering a tax bill.
Disclosure: CNBC receives no compensation from placing financial advisory firms on our Financial Advisor 100 list. Additionally, a firm or an advisor’s appearance on our ranking does not constitute an individual endorsement by CNBC of any firm or advisor. More

The Social Security cost-of-living adjustment for 2026 is slated to be announced on Oct. 24.
The federal government shutdown has delayed the Social Security Administration’s annual COLA reveal.
Experts estimate the benefit increase may fall in the range of 2.7% to 2.8%, based on the most recent government inflation data.

Peopleimages | Istock | Getty Images

The government shutdown will delay a key announcement that affects millions of Social Security beneficiaries — just how much their benefit checks will increase in 2026.
The Social Security cost-of-living adjustment for next year will be revealed once September consumer price index data, which was slated for release on Oct. 15, is available. Due to the federal government shutdown, the CPI release has been pushed to Oct. 24.

“The Social Security Administration (SSA) will use this release to generate and announce the 2026 cost-of-living adjustment (COLA) on October 24 as well,” a Social Security spokesperson told CNBC.com via email.

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The 2026 COLA for approximately 75 million Social Security and Supplemental Security Income, or SSI, beneficiaries will go into effect for January payments “without any delay due to the current government lapse in appropriation,” the spokesperson said.
Experts estimate the benefit increase may fall in the range of 2.7% to 2.8%, based on the most recent government inflation data. Such an increase would push the average retirement benefit up by about $54 per month.
Those projected increases would be higher than the 2.5% cost-of-living adjustment that went into effect in 2025, as well as the average 2.6% COLA beneficiaries have seen over the past 20 years, according to The Senior Citizens League.
Yet the COLA for 2026 is likely to be substantially lower than adjustments after the pandemic-era inflation spike. The highest recent COLA adjustment of 8.7% took effect in 2023, following a 5.9% increase in benefits for 2022. Both of those increases were the highest in decades at the time.

The size of the Social Security increase retirees receive will depend on the size of their Medicare Part B premiums, which are typically deducted directly from benefit checks.
The standard monthly Part B premium may go up by 11.6% — or $21.50 per month — to $206.50 per month from $185, according to projections from Medicare trustees. Higher earners may pay additional monthly costs, known as income-related monthly adjustment amounts, or IRMAAs.
Medicare Part B premium amounts for 2026 also have yet to be announced. More

Federal workers caught in the latest round of layoffs by the Trump administration may lose certain student loan benefits.
However, there are options available that allow borrowers to pause their payments or request a lower payment during difficult times.

The US Capitol in Washington, DC, US, on Tuesday, Oct. 7, 2025.
Eric Lee | Bloomberg | Getty Images

The thousands of federal workers newly laid off by the Trump administration face numerous financial challenges, including finding new health insurance and keeping up with recurring bills. Another key task: Figuring out what to do about their monthly student loan payment.
The permanent job cuts — which Russell Vought, director of the Office of Management and Budget, announced on Friday — are formally known as “Reductions in Force,” or RIFs. The RIFs will strip many federal workers of certain benefits related to their student loans and make it harder for them to repay their debt.

However, there are options available that allow borrowers to pause their payments or request a lower payment during difficult times.
Here’s what federal workers should know about their student loan options.

How RIFs affect repayment assistance, forgiveness

Often, federal agencies provide their employees with student loan repayment assistance of up to $10,000 per year, said higher education expert Mark Kantrowitz. In total, federal workers can get up to $60,000 under the U.S. Office of Personnel Management program.
In 2024, more than 16,500 federal employees collectively received around $150 million in student loan repayment benefits, according to an OPM report.
“This is one of the key perks that help attract recent college graduates to working for the federal government,” Kantrowitz said. “But, when a borrower’s employment is terminated, they lose this benefit.”

Federal workers should not need to repay any benefits they’ve received before the RIF, he added.

Read more CNBC personal finance coverage

Government workers who were working toward Public Service Loan Forgiveness will not receive credit for the program during their period of unemployment. PSLF offers loan forgiveness to certain public servants after a decade.
Borrowers will retain credit for qualifying PSLF payments they made before the RIF.

Try getting a lower monthly payment

Federal student loan borrowers who are laid off from their jobs are usually able to sign up for an income-driven repayment plan and get a lower payment, or even a $0 bill. IDR plans limit borrowers’ monthly payments to a share of their discretionary income and cancel any remaining debt after a certain period, typically 20 years or 25 years.
While IDR plan applications may be delayed during the government shutdown, you should be placed in a temporary forbearance after you submit your request, Kantrowitz said. You won’t need to make a payment for that period, but interest may continue to accrue on your debt.

Any unemployment benefits you collect will count as income in the U.S. Department of Education’s calculation of your monthly bill. Even so, those payments often come out to far less than what a person was earning while employed, according to a 2023 report from the National Employment Law Project.
One important thing to note: The government may calculate your monthly payment obligation under an IDR plan based on your last filed tax return, said Nancy Nierman, assistant director of the Education Debt Consumer Assistance Program in New York.
But if your earnings have dropped recently, “you can provide proof of your current income instead,” Nierman said.

Borrowers who were caught in a RIF may also be eligible for an Unemployment Deferment. Under that option, the Education Department often allows you to pause your payments if you’re receiving unemployment benefits or looking for and unable to find full-time employment, among other requirements. (Some student loans will still accrue interest during the payment pause, while others will not.)
Recent legislation will do away with the Unemployment Deferment for those who take out student loans after July 1, 2027. But current borrowers will maintain access to the relief option. More

Investors who made trades in their 401(k)s during September shifted from stocks to more conservative asset classes like bonds, cash and stable value funds, according to Alight.
Retirement plan investors may have fled to perceived safety amid political and economic uncertainty.
Some may have been rebalancing amid relatively strong returns for stocks in 2025.

Tom Werner | Getty

Investors shifted their 401(k) plan allocations away from stocks to bonds and cash in September, according to an analysis by Alight, a retirement plan administrator — a behavior that could be financially perilous, depending on their rationale.
Overall account trading among 401(k) investors was low during the month, signaling that most people weren’t actively moving money or trying to time the market, said Rob Austin, head of thought leadership at Alight.

“[But] when people did make trades, they moved from equities to fixed income,” Austin said. “There’s this flight to bonds, money market and stable value [funds].”

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During almost every day of the month, net trading favored bonds, stable value funds or money market funds, according to Alight’s analysis, which was based on 401(k) trading activity of more than 2 million people with more than $200 billion in total assets. These are more conservative asset classes relative to stocks.
Investors showed “a clear preference for safer options,” even as the stock market posted record highs, the analysis said.
Specifically, 20 out of 21 days saw net 401(k) money flowed to fixed income, Alight found.
Bond, stable value and money market funds accounted for 82% of all investor inflows in September: Bond funds captured 39% of fund inflows, while 25% of net investor money flowed to stable value and 18% to money market funds, Alight found.

By contrast, 38% of outflows came from large-cap U.S. stock funds, and 28% flowed out of company stock and 12% from small-cap stock funds, its data shows.

The analysis doesn’t indicate what drove the exodus from stocks to bonds.
Investors may have been concerned about the trajectory of the U.S. economy in September — as the prospect of a government shutdown became more likely and as the job market showed continued signs of weakness, for example — and were “trying to tighten their belts,” Austin said.
“The shift from equities to fixed income could hint at some hedging against market volatility,” Austin said.
Financial advisors generally recommend investors don’t try to time the market, a behavior they say can lead to bad financial outcomes like buying stocks when prices are high and locking in losses by selling at a low point.
“Keep in mind that nobody can really time the market well, and it’s best to have a long-term focus on what you’re trying to accomplish,” Austin said.
There may be a rosier explanation, though.
The S&P 500 U.S. stock index has gained about 13% in 2025 as of around noon ET on Monday. The shift to bonds may indicate investors are rebalancing to keep their asset allocations from getting too stock-heavy, Austin said. More