The Federal Reserve has cut rates for the third and final time this year. At its Dec. 10 meeting, the Fed reduced rates by 0.25 of a percentage point, making the new federal funds rate 3.5% to 3.75%.
This move doesn’t come as a surprise to a lot of economists, with many predicting the Fed was going to cut rates as a way to stimulate economic activity. When it’s cheaper for businesses and consumers to borrow money, it can increase demand for goods and services. This, in turn, can promote hiring.
What does this mean for you and your credit card debt? Here’s what you need to know.
[Read: Best Credit Cards.]
What Credit Card Consumers Can Expect
If you’ve been keeping an eye on your interest rates this year, you may have noticed a dip in your annual percentage rate due to the collective effect of the consecutive Fed cuts, especially if you compare the rates to last year.
With this most recent cut, you might see a minimal change to your interest rate as soon as the next billing cycle. Still, the reductions could mean some savings over time, depending on how much of a balance you carry.
Consumers should keep an eye on 2026 Fed meetings for possible rate cuts. If interest rates continue to drop, consumers will feel the impact in small waves. In the meantime, you should just keep paying your credit card as usual.
[Read: Low Interest Credit Cards]
What to Do Next
Regardless of any anticipated rate cuts, you should continue to pay (and prioritize) your high-interest credit card debt. There are several tried and true methods you can employ to help eliminate your debt:
— Apply for a balance transfer credit card. If you’re carrying a high balance on a credit card, a balance transfer credit card is a good option. You can cut into your debt while making payments during a card’s 0% introductory APR period, which can last from 12 to 21 months.
— Apply for a debt consolidation loan. You can combine multiple balances into one installment loan. The APRs may be lower on debt consolidation loans than the APRs on your credit cards.
— Use the debt avalanche method. With this method, you pay off your credit card balances from the highest APR to the lowest. The only drawback, though, is if you have a high balance, it could take a long time to pay off that first credit card.
— Use the debt snowball method. With the debt snowball method, you pay off your credit card debts in order from smallest to largest.
While rates might continue to decrease in 2026, don’t put all of your eggs in this one basket. As of now, Fed officials only anticipate one rate cut next year. Also, these rate cuts are small; if you’re hoping they will significantly ease the burden of your credit card debt, you might be hoping for a while.
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What the Fed Rate Cut Means for Credit Cards originally appeared on usnews.com
Update 12/10/25: This story was previously published at an earlier date and has been updated with new information.