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Tuesday, January 22nd, 2008 -- 2:03 PM

In a surprising move, The Federal Reserve has cut a key interest rate by three-quarters of a percentage point. The move comes after a global stock sell-off fanned by growing fears of a U.S. recession.

It's the biggest 1-day move by the central bank in recent memory.

So, what does the reduced interest rate mean to you. Gayle Rose Martinez with the Clark County UW-Extension office says it may make sense to refinance.

"The rule of thumb is that if it's two to three-percent lower than your interest rate is now, you should consider it," Martinez says. "The other thing to consider is how close are you to paying off your loan. If you're close to paying off your loan, it might not be that valuable."

Many people that go through the refinancing process also look to consolidate loans at the same time.
Experts urge caution.

"I never recommend consolidation for anyone who needs money. What happens is you'll end up creating more debt," Martinez notes. "The pressure goes off, but there's been no behavioral change."

The government is also considering pumping out income tax rebate checks of as much as $1,600.

They would like Americans to spend that money, but it might be best to hold on to it.

"If people saved more, it would create less debt. To me, that would be the best use of that money, even though that's not the intent of the government."

The Dow opened trading Tuesday down 465.

Feel free to contact us with questions and/or comments.