The old-fashioned way to buy a car. REUTERS/Carlos Barria
- The Federal Reserve's lowering of the federal funds rate will lead to an interest rate decrease for borrowers.
- Borrowers may see interest rates decrease on credit cards, variable rate student loans, auto loans, small business loans, and home equity lines of credit, making those products cheaper in the long term.
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On Wednesday, the Federal Reserve lowered the federal funds rate by 0.25%, meaning Americans are likely to see interest rates fall on everything from loans to credit cards.
Greg McBride, chief analyst at Bankrate, says that some interest rates are more closely tied to the Fed's fund rate than others. "When interest rates go down, consumers will typically see a similar decrease in credit card rates, home equity lines of credit, variable rate student loans, and small business loans," he says. Mortgages, however, won't see much of an effect, as they tend to move independently of the Fed's rate changes.
Here are five things that should get cheaper with an interest rate cut from the Fed.