CHARLOTTE — If you have credit cards, a savings account, a car loan or a home loan, you’re likely affected by recent cuts on short-term interest rates.
Consumer Reports says federal interest rate cuts mean an opportunity to save some money. Those who carry credit card balances can expect a slightly lower rate, but maybe not enough to notice.
“If you have the average debt load, which is more than six thousand dollars, if you’re making minimum payments, that monthly minimum payment changes by a dollar a month,” Ted Rossman, with Bankrate, said. “Credit card rates are so high that honestly, even if that rate fell two or three points, which could take years, it would still be high-cost debt.”
Federal student loans, car loans, personal loans, and most mortgages have fixed interest rates which don’t change unless you refinance, but the rate cut could help with new loans. Consumer Reports says if you’re shopping for a car, expect a marginally lower rate.
“It’s not going to be a huge difference, like if the average new car loan goes from 7.2 to 7%, I mean, you’re only saving a few bucks a month,” Rossman said.
After a fed cut, the interest rate on your savings account usually dips too, but not always, because of competition among banks.
“Right now, we are seeing some competition for deposits, which is a good thing for consumers,” Rossman said.
The bottom line for borrowers and savers: shop around because even a small rate change can help your wallet.
Consumer Reports says you can save on interest by working with a bank, credit union or finance counselor to get a personal loan and pay off debt. You can also get a cut-rate balance transfer, just watch the fees and the interest rate after the introductory period.
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