Prime Rate
The prime rate is the interest rate banks charge their most creditworthy customers, and it moves with the Federal Reserve's benchmark rate. It's the anchor for variable-rate products — credit cards, HELOCs, and many personal loans are priced as 'prime plus' a margin.
Prime tracks the Federal Reserve's target rate with a roughly fixed gap, so when the Fed moves, prime moves within days. Most variable consumer credit is priced as prime plus a margin set by your creditworthiness: a card at “prime plus 14%” rises by a full point the moment prime does, without any notice being required, because the terms you agreed already said so. This is why card APRs and HELOC payments climb during a hiking cycle even though nothing about you changed, and it is the argument for clearing variable-rate debt before fixed-rate debt when rates are rising. Fixed-rate loans already signed are unaffected.
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Credit Card Payoff Calculator
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HELOC Payment Calculator
Calculate home equity line payments across both phases — interest-only during the draw period, then fully amortising — and see the payment jump when repayment begins.
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