Credit Cards

Tips, news, reviews, caveats, trends, updates and analysis related to consumer and business credit cards, and prepaid debit cards. From the interest rate specialists @ FedPrimeRate.com

Sunday, August 03, 2008

U.S. Prime Rate Likely To Remain at 5.00%

If you have a variable-rate credit card in your wallet or purse, chances are the annual percentage rate (APR) is indexed to the U.S. Prime Rate. The Fed will be meeting on interest rates on Tuesday, and, thankfully, it's likely that they will leave the Prime Rate where it is.

If you have a lot of credit card debt, and you're paying interest on it, then be careful. With inflation on the minds of just about everyone in America, it's quite possible the Fed will raise the Prime Rate at some point later this year. Stay tuned to Prime Rate forecasts here.

When the Fed cuts Prime, credit-card banks usually respond by lowering your Prime-indexed APR, but they tend take their time. On the other hand, when the Fed raises Prime, banks usually respond by raising Prime-indexed APR's quickly. Something to keep in mind as you make money-related plans and decisions now and during the rest of 2008.

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