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☕ DrinkCoffeeAndProfit
Smart money moves before breakfast
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· · · Partner Message · · ·
In 2022, the last time the Fed made a major shift, the 60/40 portfolio had one of its worst years on record.
Bonds collapsed, stocks fell… there was nowhere to hide.
Larry Benedict saw it coming. He went 11-for-11 while most investors had no idea what hit them.
He says the same pattern is setting up now — on a much bigger scale.
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Inspiration Quote for the Day
“Too many people spend money they haven’t earned, to buy things they don’t want, to impress people they don’t like.”
— Will Rogers
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The Morning Ritual
The Fed Cut Rates Three Times. Your Credit Card Kept Every Penny.
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A friend of mine called last night. She heard the Fed cut rates three times last year. She pulled up her credit card statement expecting a lower APR. The line read `23.99%`. Same number as six months ago. She thought it was a mistake.
It was not a mistake. The Fed slashed a full point off its benchmark rate. Your card company kept almost every penny of it. And this afternoon at `2` PM, the Fed releases its latest meeting minutes. The question is no longer whether relief is coming. It is whether the next move is up.
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In One Sip
► The average APR on a new credit card offer is `23.79%`. That is down barely one point from the record of `24.92%` set in September `2024`.
► Americans carry `$1.252` trillion in credit card debt. That is the highest Q1 reading the New York Fed has ever recorded.
► The Fed funds rate sits at `3.50%`–`3.75%`. Four meetings in `2026`, four holds. No cut. No signal of one.
► `53%` of cardholders now carry balances to cover essentials: groceries, gas, utilities. Not vacations. Not impulse buys.
► A June `2026` LendingTree survey found `84%` of people who called their card issuer and asked for a lower rate got one. The average reduction: `6.3` percentage points. Only `23%` of cardholders have ever asked.
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Why It Matters for Your Money
Pull up your latest credit card statement. Find the line that says APR.
At `23.79%`, a `$6,000` balance costs you `$119` a month in interest alone. Send in `$200` and only `$81` touches what you owe. The rest vanishes. That is not debt repayment. That is a subscription to your own balance.
Over a year, that `$6,000` generates `$1,428` in pure interest. You are paying nearly a quarter of the balance every year just to stand still.
Bankrate ran the full math on `$5,000` at `20%` APR with minimum payments. Payoff timeline: `23` years. Total interest: `$7,723`. More than double what you borrowed.
The Fed cut its benchmark rate a full point since late `2024`. Card issuers lowered APRs by roughly one point but simultaneously widened the spread between what they pay to borrow and what they charge you. They got cheaper money. You did not get a cheaper bill.
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The Wealth Angle
I think most people misunderstand how credit card pricing works. They assume it tracks the Fed like a mortgage. It does not.
When the Fed hiked in `2022` and `2023`, issuers raised your APR within one billing cycle. When the Fed cut three times in late `2025`, those same issuers took months to pass along a fraction. That asymmetry is not a glitch. It is the business model.
Delinquency rates ticked up last year. So issuers repriced for risk on top of the wider spread. Cheaper money for them. Same expensive money for you.
Today’s FOMC minutes could make it worse. The last Fed meeting reportedly split down the middle on whether the next move should be a hike. Hawkish minutes kill rate-cut hopes. Cautious minutes stretch the pause. Either way, your `23%` APR is not coming down soon. That is the part my friend did not know when she called me last night.
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☕ Key Insight:
Card issuers raised your rate overnight when the Fed hiked. They took months to lower it when the Fed cut. On a `$6,000` balance, every month you wait costs `$119` in interest. One phone call could cut that by a third.
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Coffee Break Move
If you carry a balance: Call the number on the back of your card today. Tell them you have seen lower offers elsewhere and ask for a reduction. `84%` of people who asked got one. Average cut: `6.3` percentage points. On `$6,000`, that drops monthly interest from `$119` to about `$87`. That is `$384` a year from one phone call.
If you pay in full each month: Check whether your rewards card actually earns more than a `4%` high-yield savings account on the same dollars. If not, the card is costing you real money for points you never redeem.
My friend made that call this morning. Got `5` points off her rate. Eight minutes. The Fed needed eighteen months to move one point. She beat them before her coffee got cold.
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