Best moves to make now: Credit cards

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The Fed’s quarter-point rate cut could mean you’ll see lower financing charges on your variable-rate credit card.

About 55 percent of all credit cards are variable-rate cards and most of them are linked to The Wall Street Journal prime rate, which usually rises and falls at the same pace as the Fed’s rate changes.

Most variable-rate cards are repriced each quarter, and some variable-rate customers will see a slight dip in rates when they open their July bills.

But many more variable-rate card customers will see no change in the interest rates they pay. The reason? They’ve already hit the floor or minimum APR allowed on their cards.

Once you’ve hit the floor on a credit card, your interest rate won’t drop any lower even when the Fed cuts rates. So today’s rate cut and any future rate cuts mean little to you.

Be sure to check your cardholder agreement to see if your card has a floor, and whether you’ve hit it.

Best moves now:
If your card’s interest rate has hit the deck, consider transferring the balance to a card that’s offering a lower rate. The average rate on a standard variable-rate card was 13.43 percent on June 18; the average rate on a standard fixed-rate card was 13.74 percent. Several major card issuers are offering cards with zero-percent introductory rates that last as long as a year.

Compare credit cards using’s credit card search.