ORLANDO, Fla. – The Federal Reserve’s key interest rate cut of 0.50 percentage points on Wednesday is the biggest in 16 years.
The last time the Fed was forced to take such drastic action was in the Great Recession that began in 2008. They reacted to worse-than-expected economic data in the past month that caused stock markets to go red in August.
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By slashing interest rates, the Fed has made borrowing money less expensive, taking some of the pressure off consumers’ wallets.
Borrowing money is about to get cheaper, but if you already have debt racked up, there are creative ways to take advantage of lower rates to pay off what you already owe.
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News 6 spoke with Attorney Jim Turner, who owns the Debt Relief Law Center.
Turner specializes in helping people get out of credit card debt. He says the interest rate cut by 0.50 percentage points provides different opportunities.
“There will be some promotional offers made by credit card companies for transfers of balances. So, if you’re stuck with a 27% credit card with a credit card company, you can and you’re paying a lot of interest. You can transfer that balance to another company with a lower interest rate,” said Turner.
With these new lower rates, he also says you can also try to consolidate all your debts into one new loan. Turner says,
“Getting a personal loan at a reasonable rate allows you to take that money and to pay down an obscenely high interest rate,” Turner said.
Also, if you own a home, using your equity to get a lower-rate loan to pay off credit card debt may be an option.
“I think home equity is probably the best one, because, today, the market price of real estate has been phenomenal for most of us home homeowners,” Turner said. “The reason that I say a home equity loan is because to get a personal unsecured loan for somebody who’s already having credit card problems is going to be a problem.”
Turner says you can also contact your credit card company to ask for an even lower credit card rate.
He says to make sure you put it in writing, because your request may not get to the right person by phone.
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