On Tuesday, federal interest rates dropped by half a percentage, giving the economy a boost.
According to Business Insider, the Federal Reserve cut interest rates by 50 basis points on Tuesday to help stimulate the economy after the coronavirus outbreak caused an economic slowdown.
The 50- basis point drop in interest rates means consumers will be charged less interest on their credit cards and consumer loans.
Stockman Bank North Central President Adrian Doucette explained how those low rates will reap many benefits for borrowers, like less expensive credit.
“The big thing is - credit has gotten very inexpensive...Most credit cards are tied to prime interest rate,” Doucette said.
Credit cards with prime interest rates adjust according to the rates the federal reserve sets.
In addition to experiencing cheaper credit, borrowers looking to buy a home or vehicle are also likely to benefit from the lower rates.
Doucette said home loans are near record-lows and both auto and home equity loans interest rates have dropped.
For consumers worried about interest rates fluctuating after they’ve taken out a loan during a low-interest period, Doucette said you can talk to your lender about locking in a set interest rate.
If you have questions about loans, Doucette recommends scheduling an appointment with your lender.
“If people haven’t called their bank and talked to their lender, they really should,” Doucette said.