Auto loans
Auto loans have been extremely affordable for car buyers with good or great credit since the December 2008 Federal Open Market Committee meeting when the intended federal funds rate was lowered to zero.But to qualify for the best rates, borrowers need a FICO score well above 700.
If you plan on shopping for a car loan in the near future, save yourself some money by beginning to clean up your credit.
Start by checking credit reports and disputing any inaccuracies therein. Pay down debt and always pay your bills on time. Any black marks, especially recent ones, will cost you money.
Second, bring a large down payment to the table and don't be tempted by long-term loans. Get the shortest-term loan you can manage. Longer-term loans are more expensive over time and can trick you into buying more car than you can comfortably afford.
For car owners looking to save some money, auto loan refinancing is available. For owners upside down on their loan or owing more than the car is worth, getting the loan refinanced will probably not be possible.
But for owners who owe less than the car is worth and want a better interest rate, refinancing is a fairly straightforward process, though some minor fees may be involved, for instance to transfer the lien holder.
Before refinancing, check your current loan to see if there is a prepayment penalty, as that could end up costing more money than the refinance would be worth, depending on your interest rates.
A final caveat: Drivers of cars less than 3 years old have the best chance of successfully scoring a lower interest rate through a refinance.
You can compare auto loan rates using Bankrate's search tool.
-- Sheyna Steiner
Credit cards
As a group, credit card issuers aren't dropping interest rates as a result of the low U.S. prime rate. Soaring loss rates have cut into their profits and many have increased APRs ahead of regulatory changes that will make it more difficult to increase rates on existing balances.Asking for a lower rate may not work out in the consumer's favor, either.
"A cardholder's call to insist on a lower rate could prompt the issuer to instead raise the rate if they find out something unfavorable about the cardholder -- or even if they don't," says Greg McBride, senior financial analyst for Bankrate.com.
He says the safest situation is one where you have a strong credit score and a backup card to which you could transfer the balance if the negotiation backfires.
You can compare credit card rates using Bankrate's search tool.
-- Leslie McFadden
If you're dealing with other money problems, Bankrate can help. Read "How to solve 5 money problems."
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