How the Federal Reserve interest cuts affect your credit card rates

A finance expert says the biggest impact you may see if the interest rate in your credit cards coming down.

THE FEDERAL RESERVE HAS SLASHEDINTEREST RATES TO ZERO.IT’S AN AGGRESSIVE STEP TOPROTECT THE ECONOMY FROM THEIMPACT OF THE CORONAVIRUSOUTBREAK.

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I’M PATRICK NOLAN.AND I’M JANE MONREAL.BUT WHAT DOES THIS MEAN FOR YOUFOUR IN YOUR CORNER’S SANDRARODRIGUEZ SPOKE WITH A FINANCEPROFESSOR FROM FLORIDA GULFCOAST UNIVERSITY TO GET YOUTHOSE ANSWERS.THAT PROFESSOR SAYS THE BIGGESTIMPACT YOU COULD SEE RIGHT AWAYIS THE INTEREST RATES OF YOURCREDIT CARDS GO DOWN7:08:39SOT(DR. TON SMYTHE, FINANCEPROFESSOR, FGCU):"The interest rates on creditcards we’ll probably seerelatively quickly."THE TOPE IS TO KEEP YOU SPENDINGAND KEEP THE ECONOMY MOVING.THIS IS THE BIGGEST CUT SINCETHE 2008 FINANCIAL CRISIS...7:23:07SOT(DR. TON SMYTHE, FINANCEPROFESSOR, FGCU):"That rate outta drop by about afull percentage point almostimmediately."YOU’LL SEE THE DIFFERENCE INYOUR BILL, BUT BUSINESSES COULDBENEFIT TOO.2:53:39SOT(DR. TON SMYTHE, FINANCEPROFESSOR, FGCU):The feds action really was totry and create confidence in themarkets very broadly but alsodemonstrate that they arewilling to provide funding tobanks and others so that theyprovide lending to companiesthat are being impacted by thecoronavirus."SMYTHE SAYS YOU SHOULD THINK OFTHE ABILITY TO BORROW LIKE OILIN YOUR VEHICLEBORROWING KEEPS THE ECONOMYMOVING.NO BORROWING MEANS NO OIL ANDTHE ENGINE SEIZES AND STOPSWORKING3:28:23SOT(DR. TON SMYTHE, FINANCEPROFESSOR, FGCU):"Companies need that kind oflubrication in the form of moneybecause they have to buy things,inventory before they sellthings.

So they buy goods, workon them, and sell but that takestime and during that timethey’ve got to pay theirsuppliers and pay theiremployees."SMYTHE BELIEVE THE RATES WILLNOT GO UP ANY TIME SOON.4:08:40SOT(DR. TON SMYTHE, FINANCEPROFESSOR, FGCU):"I would say probably absolutelynot before the end of the year,so we may see those lower ratestrickle down to things like carloans, mortgages and things likethat."THIS MEANS YOU IF YOU’RE LOOKINGTO REFINANCE.8:44:48SOT(DR. TON SMYTHE, FINANCEPROFESSOR, FGCU):"I mean there’s no reason to notstart reaching out to lendersand stuff like that to see ifthey’re dropping rates but itmight take a little bit of timeto filter through the economy."SMYTHE SAYS YOU NEED TO REMEMBERTHAT BANKS AND LENDERS CAN’TKEEP BRINGING RATES CLOSER ANDCLOSER TO ZEROTHEY ALSO NEED TO BEPROFITABLE...8:57:01SOT(DR. TOM SMYTHE, PROFESSOR OFFINANCE, FGCU):"Banks don’t want to just jumpon the lowering rates bandwagonbecause once they lower thatrate, if or when rates start torise it’ll hurt theirprofitability and the key tothat is they depend on thatprofitably to provide loans notjust now but in the future."LL TAG:SMYTHE TELLS ME HE BELIEVES THERECOVERY FROM THIS WILL BEQUICKER THAN NORMAL.HE SAYS THE UNDERLYINGFUNDAMENTALS OF THE ECONOMY WERESTRONG PRIOR TO THIS ECONOMIC