What the Federal Rate Cut Means for Homeowners

The Federal Reserve said it lowered short-term interest rates by half a percentage point, to 4.75%, to combat the effects of a weaker housing market and tighter credit on the broader economy.

Here is a look at what the Fed's action means for consumers:

• Homeowners. The rate cut is good news for borrowers with home-equity lines of credit, and savings could show up as soon as the next monthly statement. 
• Savers. Savers could soon see lower payouts on their savings accounts, certificates of deposit and money-market mutual funds.
• Credit Cards. Many credit-card customers should soon see some relief. About 85% of all credit cards carry variable rates.
• Auto Loans. A rate cut isn't likely to have a big impact on new-car loans in part because more than half of all auto loans are already offered at reduced rates due to heavy manufacturer incentives...
• Student Loans. Students with private, variable-rate student loans pegged to the prime rate may see their rates adjust more quickly than borrowers with loans tied to Libor.

To get a more in-depth look read the whole article here.