The Federal Reserve is poised to start lowering interest rates as early as next month, according to recent announcements by Fed Chair Jerome Powell. This move has the potential to impact a range of financial products, from mortgages and car loans to credit cards. For Americans struggling under the weight of high interest charges, the anticipated rate cut in September could bring some much-needed relief, provided individuals take the right steps to position themselves advantageously.

Financial experts advise consumers to assess their spending habits and explore options that offer the highest returns. With rates on online savings accounts, money market accounts, and certificates of deposit (CDs) expected to decrease, now is the time to lock in relatively high returns. Currently, top-yielding online savings accounts are offering more than 5%, surpassing the rate of inflation. By moving their money into a high-yield account with an interest rate of 2.5% or higher, individuals with around $8,000 could earn an additional $200 per year.

Furthermore, the potential rate cut would also impact variable-rate debt, such as credit cards. The prime rate, which influences credit card interest rates, would lower, resulting in reduced monthly payments for consumers. However, it's important to note that APRs will only slightly ease off their currently high levels. The average interest rate on a new credit card stands at nearly 25%, according to LendingTree data. With a quarter-point rate cut, individuals would save around $21 and be able to pay off their balance one month faster. To maximize savings, experts recommend considering zero-interest balance transfer credit cards or consolidating high-interest credit cards with a personal loan.

For those planning significant purchases like homes or cars, it may be beneficial to wait for lower interest rates as they can potentially reduce the cost of financing in the long run. Mortgage rates, which are fixed and tied to Treasury yields and the economy, have already begun to decrease due to the anticipation of an economic slowdown. Currently, the average rate for a 30-year fixed-rate mortgage is approximately 6.5%, compared to a recent high of 7.22% in May. This reduction could save homeowners around $171 per month and over $61,000 throughout the life of a $350,000 loan. However, experts caution that lower mortgage rates could also drive up home prices, potentially offsetting the affordability benefit for buyers.

Existing debt holders may find more refinancing opportunities once rates drop, particularly for private student loans with variable rates tied to the prime or Treasury bill. As the Federal Reserve reduces interest rates, rates on private student loans are expected to follow suit. Eventually, borrowers with existing variable-rate private student loans may have the option to refinance into a more affordable fixed-rate loan. However, it's important to weigh the benefits against the drawbacks, as refinancing a federal loan into a private student loan means forfeiting certain safety nets, like deferments, forbearances, income-driven repayment, loan forgiveness, and discharge options.

Additionally, individuals with better credit scores may already qualify for lower interest rates. While financing costs for auto loans have been affected by inflation, experts urge consumers to focus on paying down revolving debt and improving credit scores, which can open doors to better loan terms.

The Federal Reserve's potential rate cut presents an opportunity for consumers to alleviate their financial burdens and save on interest charges. By taking proactive steps, such as locking in higher returns on savings, exploring refinancing options, and waiting for lower interest rates on major purchases, individuals can position themselves to benefit from this forthcoming monetary policy shift.