How does the Fed cut on key interest rates affect my credit card interest rates?

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credit card rates

When the Fed Reservce cuts rates, do I see any benefits on my credit card bills?
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Sunday, December 14th, 2008 at 9:17 am. Posted in Credit Card Rates. Tags: , , . You can follow this web articles through the RSS 2.0 feed.

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3 Responses to “How does the Fed cut on key interest rates affect my credit card interest rates?”

  1. Most likely not. Credit cards are free to set their rates without pinning them to any index. Rates are capped by laws at something like 36%, dependent upon the state where the the company is housed (usually South Dakota).

    Remember rates are negotiable, call the company and threaten to move the account if they don’t cut. It may happen.

  2. If your APR is based on a variable rate, then yes, you should see a reduction on your card interest rate.

    You should check your card agreement that details how your rate is determined. If it is variable like I said, it will look something like 6% + PRIME for example. The prime rate moves with the Fed Funds rate and is typicall 3% higher, so it should move to 5.25% now from 6.00%.

  3. if your credit card bases their rates off the prime index, than yes, your rates should go down.

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