If you’re in the market for a car, home or luxury money, then now is a record time to get a loan. The Federal Reserve reduced interest rates, now they are at an all time low. Good news for those looking to carry a credit card with no balance, bad news for savers who see very little to no growth on their money in their savings or CD accounts.
So, it really is good news for the credit card world. The Federal Reserve announced last month it will be locking in interest rates near 0% until the middle of 2013 for short-term loans. Many analysts believe that the Fed will increase these low interest rates to long-term loans as well in order to stimulate the American economy. Thirty-year fixed mortgages rates fell down to 4.1% in September, which is a record low for 30-year mortgages.
But consumers aren’t taking advantage of the options before them, credit card issuers also reported in September when mortgage rates were at an all time low, that there was also a 5% reduction in applications. This could be because consumers have been digging their way out of the credit card debt and loan debt that they acquired pre-recession. But for the savvy consumer, now is the perfect time to pick up a new car loan, low-interest credit card or mortgage, because interest rates will not be this low for years to come. The better your credit is, the more companies will bend over to get your attention.
It isn’t all glitter and gold in the world of low-interest loans. Consumers may take out to many loans and credit cards on the false pretense that these offers will last forever. This can have a negative effect on your credit score, when the interest rates change and you find it hard to pay back the balances. Be careful of overextending your credit reach in this beautiful borrowers market.
Pay attention to the fine print and know when the interest rates on your loan or low-interest credit card will change. Even though the market is good for borrowers, savers can still benefit. Some online banks are offering low-risk and risk-free yields on savings accounts.