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Fed Set to Lower Rates

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Community Leader
Super Contributor

Fed Set to Lower Rates

Fed Set to Lower Rates for First Time Since Financial Crisis

The Federal Reserve is almost universally expected to cut interest rates, the first reduction since officials slashed them to near zero in 2008.

 
Question: If this happens, will the interest rates on our CCs automatically decrease?
REVISED GOAL: Garden ‘til Dec 2020 — 0 inquiries

Previous Goal: Garden til APR 2020 (extended) and
800 Club (accomplished)


DEC 2019: EX 816, TU 820, EQ 810
DEC 2018: EX 777, TU 783, EQ 799
DEC 2017: EX 775, TU 778, EQ 769

|| NFCU CashRewards $30K || AmX Cash Magnet $30K || Discover IT $22.2K || Macy's $20K || NFCU CLOC $15K || NFCU Platinum $12.5K || AmX ED $11.5K || CitiCostco $7K || CitiDC $6.3K ||
Message 1 of 7
6 REPLIES 6
Super Contributor

Re: Fed Set to Lower Rates

Rates should go down with the prime rate but we will have to see what happens. It wouldn’t surprise me one bit for some of the more shady and greedy lenders to just adjust the margin up instead of letting interest rates go down. 



01/2019:
1/2020:

Hover over my cards to see my limits!
Goal cards: Cash+, Freedom.
Message 2 of 7
Valued Contributor

Re: Fed Set to Lower Rates

I was just about to ask about this.

Will it help if we call our lenders and ask for a lower APR? How will this impact car loans also?



FICO 8 Scores EQ 704 / Goal 750, EX 706 / Goal 750, TU 724 / Goal 750

FICO 9 Scores EQ 726 / Goal 750, EX 683 / Goal 750, TU 726 / Goal 750
Message 3 of 7
Established Contributor

Re: Fed Set to Lower Rates

"While the rate will eventually drop by a quarter percentage point, it might not happen as quickly as rates increased. That's because card issuers often have language in their agreements that allows them to use the highest prime rate in effect during the preceding 60-day period, McBride says."

 

How the Fed's rate cut affects your credit card, home equity line, savings rates

27 FICO Scores + 3 VS3. MTG (Mortgage), AUT (Auto), and BKC (Bankcard) are scores 5,4, and 2 from the top.

Switching to AZEO this month. EX 8 doesn't move, but EQ 8 goes up +19pts and TU 8 goes up +14pts.

Message 4 of 7
Community Leader
Super Contributor

Re: Fed Set to Lower Rates


@CassieCard wrote:

"While the rate will eventually drop by a quarter percentage point, it might not happen as quickly as rates increased. That's because card issuers often have language in their agreements that allows them to use the highest prime rate in effect during the preceding 60-day period, McBride says."

 

How the Fed's rate cut affects your credit card, home equity line, savings rates


Thanks so much Cassiecard for sharing this article. I should have known it would be pennies on the dollar 😡

REVISED GOAL: Garden ‘til Dec 2020 — 0 inquiries

Previous Goal: Garden til APR 2020 (extended) and
800 Club (accomplished)


DEC 2019: EX 816, TU 820, EQ 810
DEC 2018: EX 777, TU 783, EQ 799
DEC 2017: EX 775, TU 778, EQ 769

|| NFCU CashRewards $30K || AmX Cash Magnet $30K || Discover IT $22.2K || Macy's $20K || NFCU CLOC $15K || NFCU Platinum $12.5K || AmX ED $11.5K || CitiCostco $7K || CitiDC $6.3K ||
Message 5 of 7
Valued Contributor

Re: Fed Set to Lower Rates

Well, although it sucks, i guess is better than having them go higher :-(



FICO 8 Scores EQ 704 / Goal 750, EX 706 / Goal 750, TU 724 / Goal 750

FICO 9 Scores EQ 726 / Goal 750, EX 683 / Goal 750, TU 726 / Goal 750
Message 6 of 7
Valued Contributor

Re: Fed Set to Lower Rates


@CassieCard wrote:

"While the rate will eventually drop by a quarter percentage point, it might not happen as quickly as rates increased. That's because card issuers often have language in their agreements that allows them to use the highest prime rate in effect during the preceding 60-day period, McBride says."

 

How the Fed's rate cut affects your credit card, home equity line, savings rates


Unfortunately, many of the same banks that drag their feet on APRs had no problems lowering the interest rate on their savings accounts 60 days prior to the rates being cut.

 

For me, that's the real problem as I could care less about CC APRs and can't see any reason to ever carry a balance at their ridiculous rates to begin with. While 0.25% is only about $125/year in interest lost to me today, it's now that much further away until rates get back above the rate of inflation, and that much longer I have to park at least some of my short-term cash in dividend equities to stay ahead of it.

Message 7 of 7
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