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More pain is on the way for credit cardholders as the Fed yesterday raised short-term interest rates which triggered many banks within a matter of hours to raise their prime rate to 8%. The latest increase will show up in many credit card statements later this month and nearly all variable rates by June 30th. Since the Fed started tightening rates in July 2004, the average variable credit card interest rate has soared from 11.58% to 16.02%. More than 82% of credit card accounts now carry variable interest rate structures. Most of the top issuers charge at least nine points over the prime rate for standard accounts which means a return to 17%-18% APRs. Cardholders forced to pay the issuer's highest rate, or punitive rate, are now facing interest rates above 30%. When the Fed was chopping interest rates between 2001 and 2003, the prime rate fell more than 400 basis points from about 8% to 4%, however, credit cardholders only realized a rate reduction of about 200 basis points. Ironically, during the current tightening the prime rate has increased 400 basis points and credit cardholders have watched their cards increase by at least 400 basis points.