With the recent Fed rate cut, interest rates are at an historic low. Consumers who typically spend more than their income should utilize this phenomena as a gift. Burdened with heavy debt, homeowners should pay down their credit cards and refinance their mortgages as fast as they can.

When the Fed dropped the recommended rate that federally insured banks borrow from each other, the situation impacted consumers immediately in a number of ways. First, short-term borrowing rates immediately improved on credit cards, equity lines of credit, car loans — most all forms of consumer credit.

Second, mortgage interest rates are coming down. If you have an adjustable rate loan, refinance into a low fixed-rate. If you are thinking of buying a home, talk to your mortgage lender and let him or her run your credit report. He or she will tell you whether or not it’s smart to consolidate your credit cards.

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