Fed rate cut lowers interest rates by 1% due to coronavirus—but how much are you really saving?
The latest emergency Fed rate cut amid coronavirus concerns lowers interest rates. Here's what that means for your credit card APR.The Federal Reserve Board announced an emergency rate cut on Sunday, March 15, lowering interest rates to near zero. This rate cut comes less than two weeks after theand marks continued effort to minimize the economic impact of the coronavirus .
"The effects of the coronavirus will weigh on economic activity in the near term and pose risks to the economic outlook. In light of these developments, the Committee decided to lower the target range for the federal funds rate to 0 to 1/4 percent," the Fed said in aThe latest Fed rate cut lowers interest rates by 100 basis points, compared to 50 basis points from the March 4 rate cut.
Card issuers often implement this change soon after the Fed announcement, but it can take one to two billing cycles to appear on your account. Be on the lookout for aA 1% decrease in your interest rate seems pretty sizable, but in the grand scheme of things, it won't really help youFor instance, say you have a $6,000 balance on a card with a 15.24% APR and you plan to make $200 monthly payments until your debt is paid off.
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