Fed keeps interest rates unchanged, as expected, in final move before midterms

Two primary sources of US consumer debt – credit cards and auto loans – have been a sore point in family budgets of late.

And there is nothing to suggest much will change in the fourth quarter.

Credit cards: It doesn’t matter that the Fed left its key rate unchanged – or whether the Fed hikes or lowers rate by a quarter point or a half point in December. You are still paying a punitive rate if you carry a credit card balance.

“The average credit card rate sits around 20%,” said Bankrate credit card expert Ana Staples in an email.

You can always call your card issuers to see if they will lower your rate by a few points. But you’ll likely need a much bigger reduction to make paying off your debt feasible.

“A 0% intro APR balance transfer card is the most direct way to cut interest costs for consumers who can qualify,” Staples said.

Auto loans: The average APR on new car loans was 7% in the third quarter, according to Edmunds.com. But that masks two trends raising purchasers’ costs.

A record 25.5% of new-car buyers now finance their vehicles for 84 months or longer, and 29% of new-car buyers trading in an old car have been rolling negative equity into their new loans, said Joseph Yoon, a senior analyst at Edmunds.

So even though the Fed stood pat, such borrowers will still be charged higher-than-average rates in the fourth quarter.

One group of buyers, though, may catch a break. “Well-qualified, prime buyers with clean trades will benefit from competitive, holiday-incentivized deals, while underwater shoppers will find themselves locked into 8%-or-higher APRs just to finance vehicles they owe far more on than they are worth,” Yoon said.

Whichever group you’re in, three ways to minimize expenses: Improve your credit score. Choose the least expensive car that meets your needs. And shop for the best rate.