Credit card APRs have an 'economically meaningful' impact on consumer spending, Boston Fed finds

Because of the extremely high interest rates , credit cards are one of the most expensive ways to borrow money. Even so, at least one-third of credit card users carry a balance from one month to the next, according to the Federal Reserve Bank of Boston. However, a new paper published by the Boston Fed found that when credit card interest rates change, cardholders adjust their spending accordingly. On average, a 1 percentage point increase in the annual percentage rate, or APR, on a credit card leads to a roughly 9% drop in credit card spending the following month — which is an "economically meaningful response," the researchers found. When borrowing becomes more expensive and consumers spend less on their cards, they also reduce their debt burden, the report found. Read more CNBC personal finance coverage Boston Fed: Credit card APRs have 'economically meaningful' impact on spending Retirement saver protection rule has died — for the second time More than 7 million student loan borrowers face deadline to leave SAVE plan Department of Labor proposes rules for including alternative assets in 401 s 31.5% of car buyers underwater on trade-ins; analyst says amount owed 'troubling' Why your tax refund may look different this year, and what's actually driving it Expecting to fight about money with your partner? You might be wrong: study Belle Burden's 'Strangers' highlights key financial red flags for women Average IRS tax refund is up 10.9%, latest filing data shows 1.4 million filers face tax refund delays amid IRS paper check phaseout Family caregivers now provide $1 trillion worth of care annually, AARP finds Higher gas prices from Iran war could offset Trump's bigger tax refunds Single women see homeownership as 'a wealth-building tool,' economist says Amid March Madness, NY Fed highlights sports betting toll on credit health Social Security benefits can top $100,000 a year for some couples CNBC's Financial Advisor 100: Best financial advisors, top firms ranked "It ap...