The Federal Reserve's 50-basis-point interest rate cut is already trickling down to lower consumer borrowing costs. American Express and US Bank have lowered the APR on several credit cards on their website by 0.5 percentage points, according to LendingTree. With the holiday season just around the corner, this could make a significant impact on spending.

Splitit CEO Nandan Sheth joins Wealth! to discuss how easing interest rates will impact this holiday shopping season.

"I think the impact for consumers is going to be hard to predict. As you know, the rate cuts will flow through the system, but it will take a little bit of time. So I think really the emotion around greater confidence with a rate cut and additional rate cuts in the future, complemented by a strong stock market, I think will drive additional sales during the holiday season," Sheth tells Yahoo Finance.

He believes that small businesses will be a "dark horse" this season, noting that they often mirror consumer behavior. "Not only are they going to be more confident, but they can actually see the impact of a half percent cut. And I think we'll invest in their businesses more greatly starting off with the holiday season," he explains.

As Americans carry more credit card debt than ever before, Sheth believes that shoppers should be very careful about using buy now, pay later options this holiday season. In addition, he notes that online commerce will increase, so retailers with e-commerce channels and attractive deals will benefit most.

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This post was written by Melanie Riehl