When the Fed acts, it affects your wallet. For that matter, if the Fed stands pat, that makes a difference to your finances too. Here’s how the Fed’s latest announcement will affect credit card rates.

Experts say about 55 percent of all credit cards are variable-rate cards, and most of those are linked to the Wall Street Journal prime rate, which usually rises and falls at the same pace as the Fed’s changes in rates.

Because most variable-rate cards are re-priced each quarter, card customers have already enjoyed the benefits of the 11 rate cuts in 2001. The rate cut party is over.

Best move now:
Consider transferring a balance to a lower rate credit card. Because we probably have seen the end of the Fed cuts, there’s a good chance that variable-rate card in your wallet isn’t going to drop much lower.

If you can find a better rate on another card — take it. You also might want to consider a fixed-rate card, since variable rates have no place to go but up.

The average rate on a standard variable-rate card was 13.38 percent on May 1; the average rate on a standard fixed-rate card was 13.59 percent. Several major card issuers are offering cards with zero-percent introductory rates.

Compare credit cards using Bankrate’s
credit card search engine.