The U.S. prime rate is in principle the interest rate at which a supermajority (3/4ths) of large banks loan money to their most creditworthy corporate clients. As such, it serves as the floor for private-sector lending, and is the baseline from which common "consumer" interest rates are set (e.g. credit card rates). Traditionally, the rate is set to approximately 300 basis points (or 3 percentage points) over the federal funds rate. The Federal Open Market Committee (FOMC) meets eight times per year wherein they set a target for the federal funds rate.
