Consumers’ wallets should get some relief if the Federal Reserve lowers rates this week, but it won’t be a huge help, according to Benjamin Ayers, senior economist with Nationwide Insurance NWFAX.

“It should put some downward pressure on auto rates, mortgage rates, loan rates, but on the other side of the coin, it should put upward pressure on CD rates and saving rates that you get out there,” Ayers told Benzinga.

Lowering the Fed interest rate by only 25 or 50 basis points will not mean much for consumers in the short term, he adds.

“It’s nice but if you can’t afford a mortgage at the current level, that’s not going to change if it goes down by 25 basis points. It’s more kind of the start of a process,” he said.

“Six months, a year, 18 months from now, you’re going to see much lower rates, and that’ll really help to juice things, but in the near term, it’s going to have a pretty negligible impact for most people,” Ayers says.

A rate cut of 25 or 50 basis points doesn’t mean rates that affect consumers’ wallets will drop expectedly, said Matt Schulz, LendingTree, Inc.‘s TREE chief credit analyst.

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“While lower rates are certainly a good thing for those struggling with debt, the truth is that this one rate cut isn’t really going to make much of a difference for most people,” he said.

“It doesn’t change the fact that the best thing people can do to lower interest rates is to take matters into their own hands.”

He said the average rate on a new credit card offer should stay at a record high of 24.92% for some time if the Fed lowers rates.

“While they’ll almost certainly fall from record highs in coming months, no one should expect dramatically reduced credit card bills anytime soon,” he said.

“Barring the Fed unexpectedly stomping on the gas pedal when it comes to lowering rates, credit card APRs are still going to be high for the foreseeable future.”

A $5,000 credit card balance would take 27 months and $1,528 in interest to pay off at 24.92% if monthly payments of $250 were made. If the interest rate went down by 0.25% because of a 0.25% Fed rate cut, the interest paid over 27 months would fall by $22, resulting in savings of less than a dollar a month, Schulz noted.

Schulz said auto loan rates will get lower, too, if the Fed reduces rates, but consumers should still shop around for financing from other places besides dealerships because their rates are typically much higher.

Saving rates have already started falling and may keep doing so, but consumers don’t need to panic, he said.

“Yields aren’t going to fall off a cliff immediately after the Fed cuts rates,” he said.

Price Action: Mortgage lenders and credit card companies trended upward into Monday’s late-afternoon trading.

• Bank of America Corporation BAC rose 1.31% to $39.15
• Rocket Companies, Inc. RKT gained 3.87% to $20.38
• Discover Financial Services DFS went up 1.98% to $133.93
• Capital One Financial Corporation COF went up 1.82% to $141.50

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