Credit Sesame’s personal finance news roundup, April 5, 2025. Stories, news, politics, and events impacting personal finance during the past week.
Card rates climb sharply in 2025
A study by the Federal Reserve Bank of New York breaks down why credit card rates are currently so high. Default risk plays a significant role, with lower-credit-score customers facing significantly steeper rates than those with strong credit. High operating costs—primarily driven by expensive marketing—also contribute. With 60% of cardholders carrying a balance month to month, these rates are adding severe pressure to household budgets. See research report at NewYorkFed.org.
Q1 2025 sees steepest drop since 2022
Uncertainty over tariffs pushed U.S. stocks into their worst quarterly decline since 2022. Markets fell during five of the last six weeks of the quarter as tariff measures advanced. Even before becoming official, the S&P 500 had dropped 4.5% and the Nasdaq 10% for Q1 of 2025. Investors are worried tariffs could reignite inflation and provoke international retaliation, compounding the impact of ongoing government layoffs and budget cuts. See article at Yahoo.com.
April 2025 tariff rollout shakes markets
As anticipated, President Trump unveiled his complete tariff plan on April 2, 2025, after markets closed. By the following day, stocks plunged. Investors and economists are concerned about three things: rising costs for consumers, retaliatory tariffs that could hurt U.S. exports and jobs, and a complex regulatory maze created by overlapping trade rules in modern global supply chains. See article at Reuters.com.
2024 overdraft cap repealed by Senate
The Senate has voted to reverse a rule that would have capped overdraft fees at $5 unless banks could justify higher charges. The rule, proposed by the Consumer Financial Protection Bureau, aimed to protect consumers from excessive penalties. Critics warn that rolling it back gives banks more leeway to charge high fees, while banking groups argue that stricter limits would raise other costs or reduce access to overdraft services. See article at Newsweek.com.
2024 repossessions hit 10-year high
Rising defaults on auto loans are fueling a spike in car repossessions. Last year alone saw a 16% jump in repossessions from 2023, and a 43% increase over 2022, reaching 1.73 million vehicles. The trend may continue, as over 2.3 million Americans defaulted on auto loans in 2024. Pandemic-era forbearance programs may have delayed the problem, but the underlying financial stress is coming to light with those supports gone. See story at Yahoo.com.
10-year tax plan could widen deficit by $9.1T
The Peterson Foundation warns that proposed tax cuts could raise the federal deficit by $9.1 trillion over the next decade. The breakdown includes $7.8 trillion in lost revenue and $1.3 trillion in added interest payments. This projected shortfall far exceeds the $4.5 trillion outlined in the House budget, raising concerns that Americans may ultimately bear the cost through higher interest rates, inflation, or future tax hikes. See report at FGPF.org.
April 2025 opens with stable mortgage rates
Mortgage rates eased slightly over the past week, with 30-year loans down a single basis point to 6.64% and 15-year rates falling seven basis points to 5.82%. It marks the fifth straight week of relative calm, a notable shift after months of volatility. Since early May, 30-year rates swung sharply before flattening out, while 15-year rates have also settled into a narrower band. See rate details at FreddieMac.com.
March 2025 job growth tops 12-month average
The U.S. added 228,000 jobs in March, well above the 12-month average of 158,000. A major boost came from food and beverage workers returning after a strike. However, the report notes that severance recipients are still counted as employed, meaning the impact of federal layoffs may not yet be fully reflected. The March gains were partially offset by downward revisions for January and February, totaling 48,000 fewer jobs than initially reported. See employment report at BLS.gov.
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