Solo Biz Soft Editorial Team On September 16, 2026, the Federal Reserve raised the federal funds rate by a quarter point to a target range of 3.75% to 4.00%, its first hike since 2023, citing elevated inflation. If you carry a balance on a business credit card or have a variable-rate loan, this is worth paying attention to, because a lot of those rates move automatically every time the Fed moves.
What the Fed actually did
The Federal Open Market Committee voted 12–0 to raise the target range for the federal funds rate by a quarter point, to 3.75% to 4.00%, saying the move would support a timelier return to its 2% inflation goal. That is a reversal from the rate-cutting cycle markets had grown used to, and it is the Fed’s first hike since 2023.
How this reaches your business credit card
Almost every business credit card has a variable APR written as the Prime Rate plus a margin (for example, Prime plus 10%). The Prime Rate is set by banks but tracks the Fed funds rate closely, usually sitting about 3 percentage points above it. When the Fed raises its rate by 0.25 points, Prime generally rises by the same 0.25 points within days, and your card’s APR follows on your next statement or two. A fixed promotional rate (like a 0% intro offer) will not change until that promotion ends.
What about loans and lines of credit?
Business lines of credit are often variable-rate too, so the same Prime-Rate mechanic applies — see the business line of credit calculator to see what a small rate change does to your interest cost. Term loans can be either fixed or variable depending on the lender and agreement; check your note. SBA loans are commonly variable, tied to Prime plus a set spread. If you are shopping for new financing right now, ask directly whether the quoted rate is fixed or variable before you sign.
What to actually do about it
- Run your current balance through the credit card payoff calculator at both the old and new APR to see the real dollar difference
- If you are carrying a balance, prioritize paying it down faster while rates are rising rather than holding steady
- If you need to borrow soon, ask lenders for a fixed-rate option so a future Fed move cannot raise your payment
- Keep an eye on future Fed meetings — rate decisions are published the same day at federalreserve.gov
Frequently asked questions
Will my card's purchase APR definitely go up?
If your card has a variable APR tied to the Prime Rate, yes, it will typically rise by roughly the same amount as the Fed’s move, within one or two billing cycles. Fixed promotional rates are not affected until the promotion ends.
Does this affect loans I already locked in at a fixed rate?
No. A fixed-rate loan or card promotion keeps its rate regardless of what the Fed does next.
Where can I check the official rate decision myself?
The Federal Reserve publishes its policy statement directly on federalreserve.gov the same day as each meeting, which is the most reliable primary source.
More free tools: Credit card payoff calculator · Loan calculator · All free tools
This article is general information, not financial advice. Rates, margins and timing vary by issuer and loan agreement — check your own card or loan terms for the exact numbers.