We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence. Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover.
How We Make Money.
The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you.
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here’s an explanation for .
Editorial Integrity
Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions.
Key Principles
We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers.
Editorial Independence
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information.
How We Make Money
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey.
Bankrate follows a strict editorial policy, so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers.
We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money.
Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service.
When the Federal Reserve meets and changes rates we all have questions: What does it mean to me? Is my credit card company going to sock me with another rate increase? Bankrate is here to help. We’ve looked at five categories — mortgages, home equity loans, auto loans, credit cards and certificates of deposit — to determine if the Fed’s moves made you a winner or a loser. Here’s a look at credit cards:
Winner: Credit card debtor
In a surprise move, the Federal Open Market Committee reduced the federal funds target rate. It cut the target rate by 75 basis points, which brings the federal funds rate down from 4.25 percent to 3.5 percent. This reduction will trigger the prime, which is usually 3 percentage points higher, to drop from 7.25 percent to 6.5 percent.
Because most variable-rate credit cards are based on the prime rate, consumers with variable-rate cards may see their APRs decline. Cardholders may see some rate relief in their February payments, says Tony Plath, associate professor of finance at the University of North Carolina.
Plath says fixed-rate cardholders are not likely to see their APRs dip as a result of the FOMC’s actions.
Another professor argues that credit cardholders may not see their rates decline because the banks have tightened their credit standards.
“The banks have suffered large increases in defaults, there have been large increases in foreclosures in the mortgage market and bank lending is more carefully scrutinized now by both the regulators and the banks themselves,” says Harold A. Black, the James F. Smith Jr. Professor of Financial Institutions at the University of Tennessee, Knoxville.
“I actually think that even though under typical times the Fed lowering those short-term rates would eventually start to bring down credit card rates, it may not be as pronounced in this market simply because of what’s going on as far as credit standards are concerned.”
Take action
Regardless of whether this rate cut translates to a lower monthly payment for you, a credit card issuer can change your interest rate at any time, with 15 days advance written notice. Reduce your balances as much as possible or pay them off and you’ll save more money than you would with a rate cut.
Take action
Share