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.
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.
Labels: federal_reserve, prime_rate
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posted by Steve Brown | 8/03/2008 10:28:00 PM
2 Comments:
Banks are always quick to raise rates, and slow to lower them, like anything else. There should be a law that if the prime rate goes down, they should have to respond as quickly as they do when it goes up.
> There should be a law
> that if the prime rate
> goes down, they should
> have to respond as quickly
> as they do when it goes up...
Agreed! It's a vexing double standard and I'm surprised that more consumers don't complain about it.
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