What the Fed rate cuts mean for consumers

What the Fed rate cuts mean for consumers

RICHMOND, Va. (WWBT) - The big takeaways from the Federal Reserve’s surprise action over the weekend are two-fold.

For most Americans, it could mean lowering borrowing costs. At the same time savers will earn less on their money.

Let’s start with credit cards-- cardholders could eventually see a reduction in their annual percentage yield or APR within two billing cycles.

The chief analyst for Comparecards.com says if you have $6,000 in credit card debt this move could end up saving you almost $200 in interest.

Student loans are fixed for now but the government sets annual rates once a year based on the 10-year Treasury note. If the 10-year yield stays below 1% federal student loan rates could drop savings borrowers hundreds of dollars in interest.

On the flip side with the fed’s benchmark rate at zero savings-- rates will drop. So, you won’t earn as much on savings in a bank.

But keep in mind some online banks still pay more because of fewer overhead expenses with the brick and mortar.

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