Money is weird right now. If you've looked at your credit card statement or tried to price out a small business loan lately, you’ve probably noticed things are shifting, but maybe not as fast as you hoped. Honestly, keeping track of the prime interest rate right now feels like watching a slow-motion car crash in reverse—it’s getting better, but there are still plenty of jagged edges.
As of today, Sunday, January 18, 2026, the prime interest rate in the United States is 6.75%.
It has been sitting at this level since mid-December 2025. That was when the Federal Reserve’s Open Market Committee (FOMC) decided to shave another 25 basis points off the federal funds rate, bringing their target range down to 3.50% to 3.75%. Because the prime rate is almost always exactly 3% higher than the top of that Fed range, we landed at 6.75%.
It’s the lowest we’ve seen in quite a while.
Why the Prime Interest Rate Right Now Matters to Your Wallet
You might think the prime rate is just some boring number for bankers in suits. It isn't. It’s basically the "base flavor" for almost every variable-interest loan in the country. If you have a Home Equity Line of Credit (HELOC), the interest you pay is usually "Prime + 1%" or something similar. When the prime rate drops, your monthly payment actually gets smaller.
Credit cards work the same way. Most cards have a variable APR. When the Wall Street Journal (WSJ) publishes a change to the prime rate—which they do as soon as 70% of the nation's biggest banks adjust their rates—your credit card company usually follows suit within one or two billing cycles.
But don't get too excited.
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Even at 6.75%, borrowing isn't "cheap" in the way it was back in 2021 when the prime rate was a tiny 3.25%. We’re in a different era. The Fed is trying to find a "neutral" spot where the economy doesn't overheat but doesn't freeze to death either.
The "Hidden" Link Between the Fed and Your Bank
The Federal Reserve doesn't actually set the prime rate. That’s a common misconception. Commercial banks like JPMorgan Chase, Bank of America, and Citibank set it. However, they almost always move in lockstep with the Fed because the federal funds rate is what it costs them to borrow money overnight. If their costs go down, they pass a bit of that sunshine onto their best corporate customers, and by extension, you.
A Quick Look Back: How We Got to 6.75%
The journey to our current 6.75% prime rate has been a bit of a rollercoaster. If you look back at early 2024, the prime rate was stuck at a painful 8.50%. People were losing their minds. Mortgages were expensive, car loans were brutal, and business expansion basically hit a wall.
Then things started to cool off.
The Fed cut rates in September 2024, then again in November and December. They kept going through 2025 as inflation finally started behaving itself. We saw a series of 25-basis-point cuts that slowly chipped away at that 8.50% figure. By the time we hit December 11, 2025, the final cut of the year brought us to the 6.75% we are seeing today.
- September 2024: Prime was 8.00%
- January 2025: Prime was 7.50%
- October 2025: Prime was 7.00%
- December 2025 to Today: Prime is 6.75%
It’s a downward trend, sure. But it’s a cautious one. Jerome Powell and the rest of the Fed governors are terrified of cutting too fast and letting inflation come roaring back like a bad 80s movie sequel.
What's Coming Next in 2026?
Everyone wants to know if the prime interest rate right now is going to stay this way. The short answer is: probably for a few more weeks. The next FOMC meeting is scheduled for January 28, 2026.
The "vibe" in the markets is mixed. Some analysts, like the folks over at RSM US, noticed that the December meeting had three dissents. That’s a lot of arguing for a group that usually likes to look unified. One governor wanted a bigger cut, while two others wanted to stop cutting entirely.
This tells us that the "easy" cuts are over.
Most projections for 2026 suggest we might only see one more 25-basis-point cut in the entire year. If that happens, the prime rate would drop to 6.50% and likely park there. Some more optimistic models suggest we could hit 6.25% by 2027, but that feels like a lifetime away in this economy.
Real-World Impacts You Can Feel
If you’re sitting on debt, here’s how this 6.75% rate actually hits your bank account:
- HELOCs: If you have a $50,000 balance, the drop from 8.50% (the 2024 peak) to 6.75% saves you roughly $875 a year in interest alone. That’s not nothing.
- Small Business Loans: Many SBA loans are tied to prime. A lower rate means lower overhead, which might finally mean you can hire that extra person or buy that new piece of equipment.
- Car Loans: These are loosely tied to prime. You’ll notice that "teaser" rates are starting to look a bit better—maybe 5.9% instead of 7.9%.
Don't Fall for These Prime Rate Myths
I hear a lot of bad advice at parties. One big myth is that the prime rate is the best rate you can get. Actually, it’s the base. If you have "perfect" credit, you might get a loan at prime. If your credit is "okay," you’re getting Prime + 2% or more.
Another weird one? People think the prime rate affects fixed-rate mortgages directly. It doesn't. 30-year fixed mortgages are more closely tied to the 10-year Treasury yield. That’s why you might see the prime rate stay the same while mortgage rates jump up because of some weird news in the bond market.
Actionable Steps for This Rate Environment
If you've been waiting for rates to "bottom out" before doing anything, you might be waiting a long time. We are likely near the floor for this cycle.
Audit your variable debt immediately. Check your latest credit card statements. If your APR is still hovering around 24%, but the prime rate has dropped nearly 2% in the last year and a half, call your bank. Ask for a rate reduction. They won't always give it to you, but with the prime rate lower, you have actual leverage to negotiate.
Consider a fixed-rate conversion. If you have a variable-rate loan and you're comfortable with a 6.75% or 7% interest level, see if you can lock it in. The era of 3% money is gone. Waiting for it to return is a gamble that most financial experts, including those at Vanguard and Goldman Sachs, don't think will pay off anytime soon.
Watch the January 28 Fed announcement. You don't need to read the whole transcript. Just look for the "target range." If they keep it at 3.50% - 3.75%, the prime rate stays at 6.75%. If they cut, subtract 0.25% from your current interest expectations.
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Refinance high-interest personal loans. If you took out a personal loan in 2023 or early 2024, you likely got hosed on the rate. Shop around now. The "prime interest rate right now" makes the current refinancing environment significantly friendlier than it was twelve months ago.
The window for "cheaper" money is open, but it's not wide open. It’s more like a cracked window in a stuffy room. Take advantage of the breeze while it's here, because the Fed has made it very clear they aren't afraid to shut it again if the economy starts running too hot.
Check your balances, talk to your lenders, and don't expect a return to the "free money" era. 6.75% is the new normal for now.