Despite the ballyhoo over the Federal Reserve cutting interest rates, you shouldn't get overly excited about potential rate drops if you have credit card debt.
Even if your credit card issuer follows the Fed's lead, it won't make much of a difference if you're trying to pay off credit card debt. The average APR is currently over 20%, so last month's half-percentage point cut won’t help much.
There are strategies you can pursue to pay less credit card interest overall and in some cases no interest for a limited time.
When will my interest rates go down?
First off, it's important to know why your rates might be different this month. When the Fed changes the federal funds rate, it affects how much it costs banks to borrow money from each other, so a lower rate can trickle down to the consumer as lower borrowing rates.
The Fed cut interest rates by 50 basis points, lowering the benchmark interest rate from 4.75% to 5.00%. A half percent cut isn't going to put much of a dent in the sky-high interest rates for those carrying credit card balances.
Your credit card's variable APR is affected by more than the federal funds rate.
Your credit score will also impact the interest rate you get for the card you've applied to. Making on-time payments and lowering your credit utilization (how much of your available credit you’re using) can greatly influence your credit score.
Because multiple factors could change your card's variable interest rate, it's hard to say exactly how much your rate will change.
"This is like predicting the weather next month," CPA Howard Dvorkin of Debt.com said. "Each credit card company can interpret the Fed's rate cuts any way they wish."
Some card issuers may make deeper cuts than others because they want new customers, according to Dvorkin. Others might make only modest reductions because they have a strong rewards program and know their customers aren't going anywhere.
Some card issuers may lower their rates quickly (if they do at all), whereas others might take several months to institute a change. In other words, you can't really predict if individual credit card interest rates will fall, or by how much.
3 ways to avoid high interest rates
There are a few ways to use plastic for purchases while avoiding credit card interest rates completely -- at least in the short term.
Apply for a 0% Introductory APR credit card
A range of credit cards offer intro 0% APR on purchases, balance transfers or both for a limited time. These cards can help consumers avoid interest, for anywhere from 12 to 21 months, on new spending and debt they consolidate from other cards.
Pay off your credit card balance as quickly as possible
Because credit card interest rates are high, you should try to pay off your credit card debt as quickly as possible. That’s the only way credit card rewards actually help. Interest charges can quickly wipe away any value you'd get from your rewards, especially if you're only making your minimum payment.
Comparing interest rates with your spending habits can help you choose the right card. You'll also want to consider a card's annual fees, foreign transaction fees, balance transfer fees and late fees.
Switch to using a debit card
If you don't necessarily need a line of credit but you still want to earn rewards, consider cash-back debit cards. These debit cards provide rewards for purchases you make that are deducted from a connected checking account. As an example, the Discover Cashback Debit account offers 1% cash back on up to $3,000 in debit card purchases each month with no ongoing fees.
This account also comes with perks like early direct deposit and access to funds at more than 60,000 fee-free ATMs.
My favorite low-interest-rate credit cards
The chart below includes some of my favorite low-interest credit cards and what they work best for.
| Credit card name | Intro APR offer | Earns rewards |
| Wells Fargo Active Cash® Card* | introductory 0% APR on purchases and qualifying balance transfers for 12 months from account opening (then 20.24%, 25.24% or 29.99% variable). | ✅ |
| Chase Freedom Unlimited®️ | Introductory 0% APR on purchases and balance transfers for the first 15 months from opening your account (then 20.49% to 29.24% variable) | ✅ |
| Chase Freedom Flex®️ | Introductory 0% APR on purchases and balance transfers for 15 months (then 20.49% to 29.24% variable) | ✅ |
| Bank of America® Unlimited Cash Rewards Credit Card* | Introductory 0% APR on purchases and balance transfers for 15 months (then19.24% to 29.24% variable) | ✅ |
| Blue Cash Preferred® Card from American Express | Introductory 0% APR on purchases and balance transfers for 12 months from the date of account opening (then 18.74% to 29.74% variable) | ✅ |
| Wells Fargo Reflect® Card* | Introductory 0% APR on purchases and qualifying balance transfers for 21 months from account opening (then 18.24%, 24.74%, or 29.99% variable) | |
| BankAmericard® Credit Card* | Introductory 0% APR on purchases and balance transfers for 18 billing cycles (then 16.24% to 26.24% variable) | |
| U.S. Bank Visa® Platinum Card* | Introductory 0% APR on purchases and balance transfers for 21 months (then 18.74% to 29.74% variable) | |
| Chase Slate Edge℠ | Introductory 0% APR on purchases and balance transfers for 18 months (then (20.49% to 29.24% variable) |
*All information about the Wells Fargo Active Cash Card, Bank of America Unlimited Cash Rewards Credit Card, Wells Fargo Reflect Card, BankAmercard Credit Card and the U.S. Bank Visa Platinum Card has been collected independently by CNET and has not been reviewed by the issuer.
