Although 'prime rate' is best known as the US benchmark (US Prime = Federal Funds Target + 3 percentage points), every major banking market has an equivalent reference rate. In Switzerland, retail mortgage and consumer-loan rates are quoted as 'SARON + X%' or as a flat fixed rate set by the bank's treasury. In the eurozone, variable rates often reference Euribor; in the UK, the Bank of England Base Rate.
For retail customers the prime rate matters because most variable-rate debt is priced as a spread over it. A credit card priced at 'Prime + 12%' will increase by exactly one percentage point when the central bank raises Prime by 100 basis points. Conversely, fixed-rate loans are unaffected during their fixation period — one of the main reasons borrowers lock in long fixed terms when rates are low.
Track the trajectory of the policy rate rather than the absolute level. A 4% Prime rate that is on its way down to 2% is more borrower-friendly than a 3% Prime rate climbing toward 5%. Major central-bank meetings (SNB quarterly, ECB and Fed every six weeks) are the calendar events that move the curve.
A Swiss household holds a credit card priced at 'SARON + 11%'. SARON rises from 0.5% to 1.5% over a year, lifting the card APR from 11.5% to 12.5%. On a CHF 3,000 average balance that increases annual interest cost by CHF 30.