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Despite a wealth boom, few Americans — even millionaires — feel confident about their financial standing.
In many cases, credit card debt is standing in the way of building wealth.
“High interest rate credit card debt, more than other sorts of debt, is a savings killer, because when you have it, you have to feed the beast. You can’t save, you can’t invest,” said Jean Chatzky, CEO of HerMoney.com.

The U.S. has experienced an unprecedented wealth boom. Yet, few Americans — including millionaires— feel confident about their financial standing.
Only 12% of Americans consider themselves wealthy, according to a new report by Edelman Financial Engines.

Despite their high net worth, just 33% of millionaires said the same, the report found. Edelman Financial Engines polled more than 3,000 adults over age 30 from June 12 to July 3, including 1,500 affluent Americans with household assets between $500,000 and $3 million.
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To be sure, the rich are getting richer. The total net worth of the top 1%, defined as those with wealth over $11 million, increased by nearly $2 trillion to hit a record $46.2 trillion in the first quarter of 2024, according to data from the Federal Reserve, largely boosted by gains from their stock holdings.
But beginning in 2020 with the Covid-19 pandemic run-up in housing prices, wealth creation has been largely concentrated among homeowners, the Fed’s survey of consumer finances also shows.
“Homeownership doesn’t feel like wealth,” said Jean Chatzky, personal finance expert and CEO of HerMoney.com, who worked with Edelman Financial Engines on the report. “Homes are an asset that we use every day, it’s not like the balance in your retirement account or your savings account.”

At the same time, a prolonged period of high inflation also made practically everything more expensive and left less breathing room in household budgets.

Higher prices put households under pressure

The consumer price index, a key inflation measure that tracks average prices across a broad basket of consumer goods and services, increased 2.5% in August relative to a year earlier, according to the Bureau of Labor Statistics. That’s down from a pandemic-era peak of 9.1% in June 2022.
Even though inflation is now cooling, in most cases price increases are only slowing — not falling outright. To help make ends meet, data indicates, more people are relying on credit cards to cover day-to-day expenses.

Credit card debt is the biggest threat to building wealth

Americans now owe a record $1.14 trillion on their credit cards, and the average balance per consumer stands at $6,329, up 4.8% year over year, according to the New York Fed and TransUnion, respectively.

More borrowers are carrying debt from month to month, and a growing number are falling behind on their monthly credit card payments. Over the last year, roughly 9.1% of credit card balances transitioned into delinquency, the New York Fed reported for the second quarter of 2024.
Nearly half, 44%, of Americans said credit card debt is the biggest threat to their ability to build wealth, according to Edelman Financial Engines.
“Debt is, and has always been, a savings killer,” Chatzky said. “High interest rate credit card debt, more than other sorts of debt, is a savings killer, because when you have it, you have to feed the beast. You can’t save, you can’t invest.”
“That stands in the way of people building actual wealth and therefore feeling wealthier,” she said.

How much money it would take to feel wealthy

Most people — roughly 65% of those polled — said they would need $1 million in the bank to consider themselves wealthy, although 28% said it would take at least $2 million and 19% put the bar at $5 million or more, Edelman Financial Engines found. Among millionaires, 68% said they would need at least $3 million and 40% said feeling wealthy would require $5 million of more.
When it comes to their salary, 58% of those surveyed said they would need to earn $100,000 on average to not worry about everyday living expenses, and a quarter said they would need to earn more than $200,000 to feel financially secure.
In most cases, feeling financially secure is not based on how much you earn, but rather a commitment to save more than you spend, maintain a well-diversified portfolio and work with a financial advisor, experts often say.

“Feeling wealthy can also be connected back to not having to worry about money,” said Isabel Barrow, the director of financial planning at Edelman Financial Engines. “It’s living within your means and not getting over your head in debt.”
Just one-third, or 32%, of millionaires consider themselves wealthy and nearly half, 48%, believe that their financial plans need improvement, a separate planning and progress study by Northwestern Mutual found. Northwestern Mutual polled more than 4,500 adults in January.
“For most Americans, ‘feeling like a million bucks’ is less about believing you’re rich and more about exuding confidence and clarity about the future,” said John Roberts, chief field officer at Northwestern Mutual.
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About 18% of consumers said they planned to refinance a loan once interest rates go down, according to a report by NerdWallet.
But experts say applying for a refi doesn’t mean you’ll get approved. Your lender may say “no.”
In some instances, a mortgage modification might be a workaround.

The Federal Reserve slashed interest rates by a half percentage point, or 50 basis points, on Wednesday, its first rate cut since March 2020.
Even before the Fed rate reduction, some homeowners had already taken advantage of recent declines in mortgage rates. Refinance activity increased to 46.7% of total applications during the week ended Sept. 6, up from 46.4% the week before, according to the Mortgage Bankers Association.

Others have been waiting for the Fed to take action. To that point, 18% of consumers said they planned to refinance a loan once rates go down, according to a report by NerdWallet. The financial services site polled more than 2,000 U.S. adults in July. 
But it might be too soon to benefit from refinancing a mortgage.
“You want to wait for rates to be at a place where you’re happy to keep that rate for a period of time,” said Melissa Cohn, regional vice president of William Raveis Mortgage in New York.
Plus, experts say applying for a refi doesn’t mean you’ll get approved. Your lender may say “no.”
“Regardless of what the Fed is doing, regardless of what’s happening in the broader economy, remember that you have a part to play in all of this, too,” said Jacob Channel, senior economist at LendingTree.

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Factors that could limit your ability to refinance

1. Your financial standing has changed
Make sure your finances are in order. Otherwise, your lender might not approve your mortgage refinance, experts say.
Applying to refinance is similar to applying for a mortgage. A change in your financial situation, like a layoff or lower income, or higher debt, could mean you don’t qualify.
“Your mortgage rate and whether or not you get approved for a loan or refinance … depends on you,” said Channel.
Think about all of the “variables that got you approved in the first place,” said Cohn, such as your credit score, your income and how much debt you’ve taken on recently. A change in those variables could affect your ability to be approved.
2. You haven’t had your loan long enough
How soon you can refinance your mortgage will depend on your loan time and lender’s requirements.
You can refinance within days of closing with some types of loans, while others may require a year’s worth of payments, according to LendingTree.
3. You refinanced recently 
Technically, there are no hard limits on how many times you can refinance your mortgage, Channel said. 
But some lenders will have waiting periods, he said. In those scenarios, if you refinance today, you might not be able to do so again in December if rates move lower after the Fed’s last meeting of the year. 
“While there’s maybe not a hard limit on how many times you can refinance, you probably don’t really want to be doing it that often,” he said.

You’re paying closing costs each time you refinance, “so you don’t want to spend money unwisely,” Cohn said.
It may be in your best interest to only consider a mortgage refinance every few years, if your financial situation has changed or if rates are falling “really dramatically,” Channel explained.
“Otherwise, you put yourself in a situation where you’ve spent so much money refinancing that your monthly savings don’t really account for much,” he said.

‘It may be worth talking about a mortgage modification’

In some instances, a mortgage modification, or changes to your original home loan to make your payments more manageable, might be an option.
“If you’re really, really struggling, and say something catastrophic has happened in your life … instead of a refinance, it may be worth talking about a mortgage modification with your lender,” said Channel.
To be sure, the broader housing market is not at a risk of a collapse and most homeowners are “not teetering on the edge of foreclosure,” he said.
But if you are experiencing financial hardship, your lender may be willing to modify the terms of your mortgage, said Channel. Reach out to your lender and see if you qualify.
Remember that whether a mortgage refinance makes sense will depend on factors like your income, how long you anticipate staying in your home and your closing costs, said Cohn.
“There’s no single rule of thumb that applies to everyone in the country,” she said.
Talk with your lender or broker, or reach out to a financial advisor to determine what may work best for you, said Channel. 
“They’ll be able to walk you through the specifics of your situation,” he said.

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Experts have said 2024 promised to be a “very good year for cash savers.”
That still holds true, even after the Federal Reserve’s new 50 basis point rate cut.
Here’s what to know to find the best returns on your cash now.

Jgi/jamie Grill | Tetra Images | Getty Images

In January, experts said 2024 would be a “very good year for savers.”
And it still is, despite the Federal Reserve’s recent 50 basis point rate cut, which will push record returns on cash lower.

“Those rates aren’t going to go from awesome to awful overnight,” said Matt Schulz, chief credit analyst at LendingTree. “There’s no need to panic if you haven’t moved your money into a high-yield savings account yet or you haven’t locked in a CD rate.”
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While savers may have missed the interest rate peak, there is still value in setting money aside and finding the best place to put your cash savings now.
“The biggest mistake that people can make … is the failure to save,” said Mark Hamrick, senior economic analyst at Bankrate.
“The urgency of saving is not made any less in an environment where rates are coming down,” he added. “It’s just that the math changes.”

Some savings accounts still offer 5% yields

The Fed’s rate cut hasn’t yet shown up in the form of lower returns at many banks and accounts.
Returns on savings accounts — as measured by average annual percentage yields, or APYs — are almost seven times higher than they were before the Federal Reserve started hiking interest rates, according to Bankrate.
“A good number of financial institutions are going to need to keep their yields at levels that are sufficient to attract deposits,” Hamrick said.
The best rates on savings accounts can be found online. As of Sept. 18, high-yield online banks are offering a 5.1% average yield, according to Bankrate.
Savers who access those rates are still beating inflation.

Government data shows the 12-month inflation rate has cooled to 2.5% as of August, according to the consumer price index.
Yet, savers who do not shop around run the risk of falling behind price growth, with the average yield on traditional savings accounts at just 0.5%, according to Hamrick.
“It’s still going to be as important as ever for people to prioritize their savings, to shop around for the best rates,” Hamrick said.

Now is still a great time to lock in a CD

For savers with cash sums they do not plan to touch for a set period of time, a certificate of deposit can provide a way to lock in high rates.
A six-month or one-year CD may provide a 5% annual percentage yield, while three- and five-year CDs are still providing at least 4% returns, according to Hamrick.
“You really haven’t lost much at all at the moment,” Hamrick said.

Since CDs offer less liquidity than a savings account, it’s important to ensure you have access to cash in case of an emergency. A CD will typically charge early withdrawal penalties if the money is taken out before the set term.
Having cash set aside — whether through a high-yield savings account or a CD — can help provide protection for uncertain times, Hamrick said.

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The word “Netflix” shines brightly at the presentation of the new season (3) of the Netflix series “Bridgerton” in the Flora. 
Rolf Vennenbernd | Picture Alliance | Getty Images

As the earnings reporting season draws to a close, many companies were able to deliver solid results despite pressures on consumer spending.
Investors seeking stocks that can withstand short-term pressures and deliver over the long term should track the recommendations of top Wall Street analysts.

Bearing that in mind, here are three stocks favored by the Street’s top pros, according to TipRanks, a platform that ranks analysts based on their past performance.
Take-Two Interactive Software
This week’s first pick is game developer Take-Two Interactive Software (TTWO). In August, the company reported better-than-expected adjusted earnings for the first quarter of fiscal 2025.  
Recently, Baird analyst Colin Sebastian reiterated a buy rating on Take-Two Interactive stock with a price target of $172. The analyst is upbeat about the company’s upcoming releases and expects its bookings to increase by at least 40% in the next fiscal year following mid-single-digit growth this year.
Sebastian’s robust bookings growth estimate is backed by the expected release of key titles – Civilization VII, Borderlands 4 and the much-anticipated Grand Theft Auto VI (GTA VI). Moreover, he expects the company’s new console/PC releases to deliver about $2.25 billion in incremental bookings. He anticipates the mobile business will contribute around $3.1 billion, and catalog/live services will generate $2.5 billion in the full year.
While management has expressed high confidence in its ability to release GTA VI next year, the analyst thinks that any potential delay between two fiscal years would have a limited impact on TTWO’s two-year earnings path. He expects this vital release to generate about $3 billion of bookings in the first year, while enhancing the company’s financial flexibility with over $2 billion in free cash flow.

“Beyond the next 12-24 months, Take Two should benefit from the long-tail of live services/catalog sales and further depth in the pipeline with sequels to Red Dead, BioShock and Max Payne, and perhaps new 2K sports franchises,” said Sebastian.
Sebastian ranks No. 286 among more than 9,000 analysts tracked by TipRanks. His ratings have been profitable 56% of the time, delivering an average return of 12.8%. (See TTWO Ownership Structure on TipRanks) 
Costco Wholesale
Baird analyst Peter Benedict is bullish on the prospects of membership-only warehouse chain Costco Wholesale (COST). Earlier this month, Costco reported a 7.1% rise in its net sales for the retail month of August (the four weeks ended Sept. 1).
Excluding the impact of changes on gasoline prices and foreign exchange, Costco’s August comparable sales also grew 7.1%. Benedict noted that the August comparable sales growth was sequentially steady compared to the 7.2% increase in July, as stronger traffic was offset by some moderation in average traffic growth.
Benedict increased his Q4 fiscal 2024 EPS estimate to $5.10 compared to the Street’s consensus estimate of $5.07 per share to reflect better-than-expected sales in the fiscal quarter. “COST’s traction with consumers continues to stand out against an increasingly challenged spending backdrop,” said the analyst.
Benedict highlighted that the company delivered solid core comparable sales growth yet again and displayed persistent strength in the non-foods area, even as there is continued softness in discretionary categories across most of the retail sector.
The analyst thinks that Costco’s “growth staple” appeal remains intact, thanks to its consistent performance, store network expansion, encouraging membership key performance indicators and the recently announced fee hike. He reiterated a buy rating on COST stock with a price target of $975.
Benedict ranks No. 30 among more than 9,000 analysts tracked by TipRanks. His ratings have been successful 71% of the time, delivering an average return of 16.1%. (See COST Options Trading on TipRanks) 
Netflix
Streaming giant Netflix (NFLX) is the third pick for this week. Despite macro pressures and intense competition in the streaming space, the company has been able to impress investors with its crackdown on password sharing and the rollout of an ad-supported tier.
JPMorgan analyst Doug Anmuth contends that while “advertising is not in NFLX’s DNA” and the company is creating the ad tier from scratch, it has the ability to emerge as a major ad player as scale and monetization grow in 2025 and beyond. He estimates that ad revenue, excluding the subscriptions component, will account for more than 10% of the company’s revenue in 2027.
The analyst acknowledges that the scale of Netflix’s ad tier currently lags behind that of peers like Amazon, which gained from automatically including its Prime members in its ad-supported tier. That said, he is confident that Netflix can boost its scale by making changes in plans and pricing, bundling offers and providing live content that has extensive appeal.
Anmuth further explained that while Netflix’s ad tier is dilutive to its overall average revenue per member, the impressive 150% growth in the company’s upfront ad sales commitments, greater scale and improved focus on ad formats and ad tech should drive higher monetization.
Overall, Anmuth is optimistic about Netflix’s ability to grow its top line in the mid-teens this year and in 2025, further improve its margins, and deliver multi-year free cash flow growth. He reaffirmed a buy rating on NFLX stock with a price target of $750.
Anmuth ranks No. 99 among more than 9,000 analysts tracked by TipRanks. His ratings have been successful 61% of the time, delivering an average return of 17.7%. (See NFLX Financials on TipRanks)  More

Mari Pepin, a previous contestant from ABC’s “The Bachelor” franchise, opens up about the financial side of reality TV stardom.
With or without finding a happily ever after, dating show contestants often find opportunities as influencers once they have built a fan base.
Influencers can make between $2,500 and $5,000 per month, according to a 2023 NeoReach survey.

Mari Pepin and Kenny Braasch got engaged on season 7 of “Bachelor in Paradise” and married in 2023.
Photo: Dolce Amor Co.

Theoretically, contestants on ABC’s “The Bachelor” are looking for love. What they often find are business opportunities.
Mari Pepin, 28, got both.

Pepin was a participant on “The Bachelor” season 25, which aired in 2021, and then returned for “Bachelor in Paradise” season 7 later that year. She went home with Kenny Braasch’s final rose — they’ve now been married for more than a year — and an Instagram base of more than 300,000 followers, up from 50,000 before her reality TV appearances.
That’s when the money started to come in.
After “Bachelor in Paradise” aired and her following jumped, influencer opportunities followed. “Instantly, we were getting huge deals,” she said.
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In most cases, companies send Pepin products, which she then tries at her home in Chicago. If she likes an item, she’ll post about it, hitting the company’s suggested talking points and then earning a fee, she said.

Pepin has worked with Loreal, Factor meal delivery, Ruffino wine and Mermaid hair products, among others. On some account promotions, Pepin and Braasch team up. Braasch also has partnerships, including Apothic wine and gambling site BetUS, which connected Pepin with CNBC.

Mariela Pepin, who goes by Mari, was a contestant on “The Bachelor” season 25 and then “Bachelor in Paradise” season 7.
Photo: Dolce Amor Co.

Brands giving products to celebrities and influencers in return for promotions on their social media feeds is a common marketing strategy, according to a new report from Influencer Marketing Hub.
Alternatively, the businesses will sign deals with influencers to promote the product in their posts for a fee or a share of affiliate revenue, similar to a commission for each sale. The posts alone help drive sales, the survey of more than 3,000 marketing agencies, brands and professionals found.
For the companies, it’s an approach that has proved effective when it comes to building a brand, according to the report.

Influencers ‘can make bank’

For many reality television stars, influencing has become a popular side hustle with a low barrier to entry.
Depending on the platform and follower count, along with other factors, content creators can make between $2,500 and $5,000 per month, a 2023 NeoReach survey of more than 2,000 full- and part-time creators found.
Although Pepin earned more than $50,000 last year through influencing and has made as much as $12,500 for a single post, according to records reviewed by CNBC, the number of prospects, and payout, can vary greatly.
“That inconsistency is really scary for me,” she said.

“The larger the following, the more they can make bank,” said Casey Lewis, a social media trend expert and founder of trend newsletter After School. “If they really juice the affiliate, they can make a ton of money.”
In some cases, that can be enough for a supplemental income stream, but few earn a living wage. Most full- and part-time creators earn an annual income of $15,000 or less, according to NeoReach’s survey.
Still, 57% of Gen Zers said they would like to become an influencer if given the chance, according to a 2023 report from Morning Consult. The report was based on a poll of more than 2,200 adults and a separate survey of 1,000 Gen Zers ages 13-26 who use various social media platforms.
“A lot of people aspire to be influencers because they want to be self-employed and to be recognized for their taste and to be someone,” Lewis said.
However, “there’s awareness that it’s not that easy,” she added. “Monetizing your life in that way is exhausting.”

Nearly half of young adults have a side gig

These days, having any sort of side hustle can provide a much-needed income boost to help keep up with a higher cost of living.
As of 2024, 36% of U.S. adults have a second job and make an average of $891 per month in extra cash from that role, up from $810 in 2023, according to a June report by Bankrate that polled more than 2,300 U.S. adults. Among Gen Zers and millennials, the share of adults with a side gig jumps to nearly 50%.

Pepin has a full-time day job as a social media marketing manager. “The influencer stuff is just kind of extra. It’s not really reliable,” she said.
For now, though, Pepin is making the most of her reality TV fame as one half of a successful “Bachelor” couple.
“I think you have to strike while the iron is hot,” Pepin said.
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House lawmakers have reached the number of signatures they need to prompt a vote on a bill that would eliminate certain rules that reduce Social Security benefits for pensioners.
The Social Security Fairness Act would repeal rules known as the Windfall Elimination Provision, or WEP, and the Government Pension Offset, or GPO.
The bipartisan bill has wide support in both the House and the Senate.

Cavan Images | Cavan | Getty Images

House lawmakers in Washington have the signatures they need to force a vote on a bill to eliminate rules that reduce Social Security benefits for certain retirees who also receive pension income.
On Thursday morning, Reps. Abigail Spanberger, D-Va., and Garret Graves, R-La., marked the 206 signatures a discharge petition had thus far collected with a press conference outside the Capitol building alongside organizations representing police, firefighters, postal workers, teachers and other government employees often affected by those rules.

By Thursday afternoon, the number of signatures had climbed to 218, enough to force a vote on the bill.
The bipartisan bill — the Social Security Fairness Act — would repeal rules known as the Windfall Elimination Provision, or WEP, and the Government Pension Offset, or GPO, that currently reduce Social Security benefits for almost 3 million Americans.
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“We have taken on, on a bipartisan basis, something that’s just completely unjust, that has been going on for over four decades,” Graves said.
“This is a situation where you have some of the most important occupations, some of the most important contributors to our community, that are being discriminated against,” he said.

How WEP, GPO rules affect retirement decisions

The Windfall Elimination Provision reduces Social Security benefits for individuals who receive pension income from public roles that did not contribute Social Security payroll taxes — but who also paid into the program and qualified for benefits through other work. The WEP affects about 2 million Social Security beneficiaries.
The Government Pension Offset, meanwhile, reduces spousal benefits for federal, state or local government employees who did not contribute to Social Security payroll taxes. The GPO affects almost 800,000 retirees.
The rules can force affected workers to make tough retirement decisions.
That includes Lois Carson, president of the Ohio Association of Public School Employees, who said during Thursday’s press conference that the rules affected the decisions she made to support her family after her husband passed away. While Carson was able to receive income from his pension, she was not able to access Social Security survivor benefits, as she and her husband both worked as public employees.
“I continue to work after 37 years, because if I retire, I’m going to lose half of my funding because of this law,” Carson said.
Carson said a friend lost the $1,200 monthly Social Security benefit checks she received on her husband’s record after she retired from her job as a public school employee.

Bill faces uncertainties despite bipartisan momentum

The bill to repeal the WEP and GPO rules is the “most bipartisan and co-sponsored bill in the United States Congress,” Rep. Greg Landsman, D-Ohio, said Thursday.
The House version of the bill currently has 327 co-sponsors.
If the bill is put up for a vote in the House, it may pass, experts say.
Then it would go to the Senate, where the bill has 62 co-sponsors.
Time constraints may limit the effort’s progress, Emerson Sprick, associate director for the Bipartisan Policy Center’s economic policy program, recently told CNBC.com.
“Both the Senate and the House have a lot of work to do before the end of the year,” Sprick said.

While experts agree the WEP and GPO rules could be adjusted to be fairer, some say eliminating them altogether may not be the answer.
The Congressional Budget Office has estimated the move would cost around $196 billion over 10 years. Social Security already faces a trust fund shortfall, with the program’s combined funds projected to run out in 2035, when 83% of benefits will be payable.
Others have voiced concerns that repealing the rules would result more a more generous income replacement formula for workers with combined public and private work compared with others who contribute to Social Security for their entire careers.
“To the extent that people have worked both in covered and non-covered employment, in general they should be receiving some Social Security benefit,” said Paul Van de Water, a senior fellow at the Center on Budget and Policy Priorities.
“The question is how much,” he said. More

The Federal Reserve just slashed interest rates by a half percentage point.
That may open up some refinancing opportunities for borrowers, depending on the type loan.
From mortgage refis to credit cards, auto loans and student debt, financial pros break down what you need to know.

Moyo Studio | E+ | Getty Images

The Federal Reserve announced a half percentage point, or 50 basis points, interest rate cut at the end of its two-day meeting Wednesday. And, naturally, some Americans will want to make the most of the central bank’s first rate cut since the early days of the Covid pandemic.
“How quickly the impact of lower rates is felt depends on whether households have variable or fixed financing rates” said Stephen Foerster, professor of finance at Ivey Business School in London, Ontario, Canada. Some adjust fairly quickly, others don’t reset at all.

That is, unless you can refinance.
According to a recent report from Nerdwallet, 18% of consumers said they planned to refinance a loan once rates go down. The financial services site polled more than 2,000 U.S. adults in July.
While taking advantage of lower rates could make financial sense, there are often other considerations, as well, depending on the type of loan, experts say.  
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No ‘universal rule’ for refinancing a mortgage

For starters, while mortgage rates are partly influenced by the Fed’s policy, they are also tied to Treasury yields and the economy. So, home loan rates may continue to fluctuate.

Further, most homeowners still have a lower rate on their loan than what they could likely get if they were to refinance now — with the exception of those who bought a house within the last two or three years, according to Jacob Channel, senior economic analyst at LendingTree. 
Roughly, 82% of homeowners are locked in at rates below 5%, and 62% have rates under 4%, a 2023 Redfin analysis found.

“There isn’t a universal rule for when people should think about refinancing a mortgage,” Channel said. “Some people will tell you that you shouldn’t think about refinancing until you could get a rate that’s at least 50 basis points lower than what you currently have, others will say that you should wait until you could get a rate that’s 100 or more basis points lower.”
Other factors to consider are your creditworthiness, which will ultimately determine what rate you can qualify for, as well as the closing costs, which typically run 2% to 6% of your loan amount to refinance, according to LendingTree.
“There’s no one-size-fits-all answer to the question of whether or not somebody should refinance their mortgage,” Channel said.

Don’t wait to reassess credit card debt

When it comes to credit card debt, the math is a little more cut and dried.
Since most credit cards have a variable rate, there’s a direct connection to the Fed’s benchmark. In the wake of the rate hike cycle, the average credit card rate rose from 16.34% in March 2022 to more than 20% today — nearing an all-time high. Those APRs will edge lower now, but not significantly.
No matter what the Fed does, refinancing high-interest credit card debt is a good move, according to Matt Schulz, chief credit analyst at LendingTree.
“A 0% balance transfer card is likely your best choice, assuming you have good enough credit to get one,” he said. “A low-interest personal loan can be a good tool, as well.”

Alternatively, borrowers can call their card issuer and ask for a lower interest rate on their current card. The average reduction is about 6 percentage points, one LendingTree survey found. “That’s like going from 25% to 19% and is way, way more impactful than anything the Fed’s going to do,” Schulz said.

Auto loan refi options depend on equity

Although auto loans are fixed, the rates on new-car loans will come down with the Fed’s moves.
But for those with existing auto loan debt, refinancing is not a given.
“An auto loan’s interest is weighted more towards the beginning of the loan; therefore, if you’ve had the loan for a year or two, you’ve already paid quite a bit in interest,” said Ivan Drury, Edmunds’ director of insights. “Even though lowering your rate makes the monthly payment less, it could result in paying more interest over the life of the loan.”
In addition, “if you were paying mostly interest, you might not have enough equity — or any — to really leverage the lower rates,” he said, unless you put more cash toward refinancing and take out a smaller loan.
Consumers may benefit more from improving their credit scores, which could pave the way to substantially better loan terms, he said.

Refinancing student debt can come with risks

Eventually, student loan borrowers with variable-rate private loans may have reasons to consider refinancing as rates come down.
“Borrowers can choose to refinance their loans to take advantage of lower prevailing interest rates or improvements in their credit scores, which can also lead to lower interest rates, or if they want to switch lenders,” said higher education expert Mark Kantrowitz.
However, refinancing a federal loan into a private student loan will forgo the safety nets that come with federal loans, such as deferments, forbearances, income-driven repayment and loan forgiveness and discharge options, according to Kantrowitz. 
And like other types of refinancing opportunities, extending the term of the loan means you ultimately will pay more interest on the balance.
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Traders work on the floor of the New York Stock Exchange on September 18, 2024 in New York City. 
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Here’s what CNBC TV’s producers were watching as the Federal Reserve slashed rates by a half point on Wednesday and what’s on the radar for the next session.

Existing home sales due Thursday at 10 a.m. ET

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Beazer Homes’ performance in the past month

Morning restaurant reports

Cracker Barrel and Darden Restaurants will release earnings before the bell.
Cracker Barrel is down more than 3% from three months ago. The stock is up about 6% week to date, but it’s 49% from the late December high.
Darden Restaurants is up roughly 5% in the past three months. Darden runs restaurant brands like Olive Garden, Longhorn Steakhouse, Ruth’s Chris and Bahama Breeze. The stock is 9.5% from the March high. 

Afternoon reports

FedEx reports after the bell. The stock is up 20% in the past three months. It stands 5% from the July 16 high.
Lennar also reports after the bell. The stock is up 26% from three months ago. It hit a new 52-week high Wednesday. It is up more than 5% in a week.

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FedEx shares in the past three months

Rate cuts and banks

CNBC TV’s Leslie Picker will report on the banking sector’s reaction to the Federal Reserve’s half-point interest rate cut.
All the big banks are down in September: JPMorgan is off by more than 7%. The stock is 7.5% from the August 30 high.
Goldman Sachs is down about 5% in September. The stock 6% from the July 31 high.
Wells Fargo is down 7% in September. The stock is down 12.6% since mid-May.
Citigroup and Morgan Stanley are down about 4% in September. Citigroup is 11% from the July 17 high, and Morgan Stanley is 8.5% from the July 16 high.
Bank of America is down 2% in September. The stock is 10% from the July 17 high. 

Rates and the Fed

Yields on the 10-year and two-year Treasury notes rose a bit Wednesday after the Fed’s cut.
Yields on the one-year, six-month, three-month and one-month Treasury bills all fell.
The 10-year is now at 3.7%.
The two-year is 3.62%.
The one-year is 4.02%.
The six-month is 4.58%.
The three-month is 4.78%.
The one-month is 4.79%. 

Gold

On Wednesday, the commodity hit a new high.
Jeffrey Gundlach of DoubleLine Capital, who correctly predicted a 50 basis point cut, told CNBC TV’s Scott Wapner on Wednesday that “gold is symptomatic of a market in accumulation mode.”  He also sees political risk and thinks that is likely to help gold keep moving higher.
The VanEck Gold Miners ETF (GDX) is up roughly 5% in a week. More