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By AnnaMaria Andriotis
SmartMoney.com


IN AN EFFORT to reignite the slowing economy, the Federal Reserve has been taking a hatchet to the federal funds rate. Since September, the central bank has slashed rates seven times, from 5.25% to 2.25%, hoping that consumers will take advantage of low-interest loans and spend more money.

However, low rates like these can be a bit of a Catch-22 for consumers. On one hand, their money-market accounts or certificates of deposit start earning less in interest, thereby curbing their savings' growth. On the other hand, they can lock in lower-interest loans and credit-card deals, potentially saving hundreds or even thousands of dollars in interest payments.

Unfortunately, that perk can't be exploited by everyone. Given tightened lending standards, borrowers need a credit score of at least 700 to land some of the lowest-cost loans, says Scott Bilker, founder of DebtSmart.com.

Here are five ways you can make today's low rates work for you:

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