LendingTree Money Insights: Trusted Advice From Our Experts
Federal Reserve cuts rates for first time since December
Published Sept. 17, 2025
The Federal Reserve lowered interest rates by a quarter-point on Sept. 17 — the first time in 2025. This is good news for those struggling with credit card debt, but not so great for savers.
Here’s what you need to know.
Credit card rates are about to fall
When the Fed moves, card interest rates usually follow, meaning Americans should soon see relief on existing balances and new card offers. While any reduction is welcome news, one rate cut is unlikely to have a significant impact, though.
For example, if you owe $7,000 on a credit card with a 24.36% APR — the average APR on new credit card offers, per LendingTree data — and pay $250 a month on that card, it’ll cost you $3,453 in interest and take 42 months to pay off.
Lower the APR by a quarter-point to 24.11% with the same balance and monthly payments, and it’ll cost you $3,391 in interest and take 42 months to pay off. That’s a savings of $62 over the life of the balance, which is significant but isn’t exactly life-changing either.
Rates for home equity lines of credit (HELOCs) are also typically tied to the Fed’s movements, so those should move lower as well after the rate cut.
Impact on other loan rates not as clear
There’s certainly hope that the Fed’s actions will lead to lower rates on mortgages, auto loans, personal loans and other types of loans, but there are no guarantees. That’s because these types of loans’ rates aren’t directly tied to the Fed’s actions the way that credit card and HELOC rates tend to be.
In fact, mortgage rates went up amid the Fed’s rate cuts last fall. However, since mortgage rates have fallen significantly in recent months, there’s reason for optimism that the Fed’s moves will help mortgage rates continue to move lower. Still, that’s far from a sure thing.
Returns on high-yield savings accounts, CDs likely to fall, too
Even though the yields from high-yield savings accounts (HYSAs) and CDs are down from highs a year ago, people have still been able to get substantial returns — often 4.00% or higher — throughout 2025. Now that the Fed has begun lowering rates again, those yields are likely to follow suit.
Still, rates won’t change from excellent to awful overnight. It’s still worth your time to shop for a HYSA if you haven’t already done so. It’s also worth considering buying a longer-term CD — perhaps with a maturity of a year or longer — to lock in rates for a little longer. Just make sure you won’t need to access those funds before maturity hits. Otherwise, the penalty costs could outweigh any extra interest you might’ve earned.
You have more power over your rates than the Fed
No, really. It’s true. Simple moves you make can have a far bigger impact on your interest rates than the Fed will.
- Comparing mortgage offers from multiple lenders can help you secure a lower rate and save you tens of thousands of dollars over the life of the loan.
- Getting a 0% balance transfer credit card can significantly reduce your interest and shorten your payoff time on a transferred balance.
- Consolidating debts with a low-interest personal loan can lower your interest rate and reduce the number of bills you have to pay each month.
- Calling your credit card lender and asking for a lower interest rate can be a big step. A 2025 LendingTree study found that 83% of cardholders who asked for a lower APR on a credit card in the past year got one, and the average reduction was more than 6 percentage points.
You have much more power over your money than you think. While there’s no guarantee these steps will be successful — for example, you may need to have a credit score of 680 or higher to get a 0% balance transfer card — they’re worth the effort.
35% of cardholders wouldn’t cancel if their annual fee jumped $100
Published Sept. 16, 2025
“If your primary credit card’s annual fee rose by $100 without adding any benefits, would you keep it?”
LendingTree asked this question in July to more than 800 Americans with an annual fee credit card, and 35% said yes.
I was stunned. Closing a credit card isn’t something to be done lightly, but the fact that more than 1 in 3 people we asked would willingly absorb a $100 annual fee increase without getting anything new in return blew me away.
High-income earners, millennials ages 29 to 44, Republicans and men are among the most likely to say yes. Here’s a closer look.
- 50% of those making $100,000 or more a year say they’d keep the card, versus no more than 31% among lower-income brackets
- 46% of millennials, versus 39% of Gen Zers ages 18 to 28, 33% of Gen Xers ages 45 to 60 and 10% of baby boomers ages 61 to 79
- 44% of Republicans, versus 35% of Democrats and 28% of independents
- 44% of men, versus 25% of women
We wanted to ask this because sky-high annual fees have been in the news lately. Several major credit card issuers have introduced new high-annual-fee cards or announced plans (or been rumored to do so soon) to hike the annual fee on a current high-annual-fee card. Unlike the hypothetical card in our question, these updated cards are expected to come with at least some new benefits. Still, given that many high-end cards already have annual fees of $500 or higher, any new increases are noteworthy.
There’s risk for card issuers with any annual fee increase. A 2024 LendingTree survey of credit cardholders (including those who don’t have an annual fee card) found that just 9% of cardholders would consider paying an annual fee of $400 or more on a card, including 3% who said they’d be willing to pay $1,000 or more depending on the benefits. Meanwhile, 45% would never pay an annual fee and another 30% would never pay $100 or more for one.
Still, the results of our July survey clearly show that people haven’t hit their ceiling when it comes to credit card annual fees. That means we can expect to continue seeing banks push the envelope in the future.
What to do in case of an annual fee increase
- Ask for a fee waiver or reduction. A separate 2025 LendingTree survey found that a stunning 95% of cardholders who asked to have an annual fee waived or reduced in the past year got their way, though just 39% of those with an annual fee credit card asked. It stands to reason that a bank might be more willing to waive an $89 fee than a $695 fee, but it can’t hurt to ask. That 95% success rate means that it isn’t just people with low annual fees, 800 credit scores and long track records getting their way.
- Downgrade to a no-annual-fee version. This isn’t always possible, but it’s certainly worth asking about. When it comes to your credit, downgrading isn’t seen as closing an account and opening a new one. Instead, it’s seen merely as changing to a different version of the same card.
- If all else fails, it’s likely OK to cancel the card. Generally speaking, when in doubt, you should probably just keep that credit card you’re considering closing. One major exception to that rule is when an annual fee is involved. If a card has an annual fee and you know that you’re not going to use it anymore, you’re likely better off canceling the card. There’s no need to pay that annual fee just to protect your credit.
Credit pro tip: If you cancel the card, consider asking for a credit limit boost on another one of your cards. That new credit can replace the available credit you lost with the newly closed card and minimize the damage the closing did to your credit.
