Pure Economics-How the Fed's Lower Rates AFfect You

How Does the Federal Reserve's cut in interest rate really affect you, the consumer?

Credit Cards- Over the past year, the rates have kept the average advertised credit card rates stable at 12%. Consumers with good credit can find low credit card rates. However, the classification of "good credit" has changed. To qua;ify for low rates, consumers must pay bills on time, don't skip payments, apply for new credi cards sparingly,and keep your credit card utilization at a maximum of 30% to 40% of your credit limits.

Mortgages- Mortgage rates will not necessarily decrease.

Home Equity Lines of Credit- Because these loans are closely tied to the prime rate, consumers may get some rate decreases.

Refinancing Loans-Lower rates make refinancing cheaper. Consumers with an adjustable loan that is scheduled to reset at a much higher rate, may find that refinancing is a good option.

Car Loans and Personal Loans-Lower interest rates make borrowing money cheaper, therefore, consumers shopping for a new car or peronal loan will most likely have a lower interest rate.

Savings Accounts- The money earned on savings accounts will decrease due to lower rates. A good alternative is to use online anks that offer higher returns than traditional banks.