How The Fiscal Cliff Could Affect Your Credit Cards (With Photo Gallery)

HIGHER INTEREST RATES: Credit rating agencies warn that failure to reach a bipartisan agreement could endanger the nation's credit rating. Credit downgrades are similar to a drop in credit scores, and indicate a higher risk of default on loans. This can lead to higher interest rates for banks and the government. Banks depend on getting low interest rates so they can make profits on the loans they make. If banks pay higher interest rates, this will squeeze profits that have already been sliced by regulations and changes in the industry. Increasing interest rates for government and bank loans could lead to increases in all interest rates, including credit cards, mortgages and student loans.

Credit: MGN Online