Why are interest rates so high right now?

I’m no economics expert but it seems like there’s a huge disconnect with interest rates. If the goal is to slow down the economy, I get it. <br><br>And yes, if you were making a big purchase like a car or home, then yeah I get why you wouldn’t want to have a higher interest rate. <br><br>But on like a credit card for example, let’s say you have a 1,500 credit limit. You have 1,500 in spending per month. Then you start to need more. Every month you have more credit card debt. You’re still paying for all the other stuff. Food, car, car insurance, gas, home, home insurance, etc. <br><br>For example, if you have 500 in cc debt and you’re currently paying 20%, how does it make sense for you to need to pay more money just because interest rates are high? It costs the same to pay the credit card company with a 20% interest rate as it does with a 30% rate. I don’t get how the cost to lend money changes. The amount of debt hasn’t changed but now you pay more? <br><br>I thought a higher interest rate was supposed to borrow less money. But in a situation where you already have the debt, it’s not changing anything. It’s only affecting new purchases. Only new purchases would be affected by a higher interest rate.<br><br>From what I know, banks don’t really borrow money from the fed. Only in extreme cases. The same dollar is used hundreds of times. <br><br>The FED is just reducing money supply by buying bonds and not creating more money. If you have 100$ in your checking account and you want to borrow 500, you will borrow 500 more. If you have 80$ in your checking account then you can only borrow 400. It doesn’t matter what the interest rate is. You can’t borrow more money than you have, and no one wants to borrow money with a 20-30% interest rate.<br><br>From what I know, banks are required to keep 8-10% of their money supply in cash.