The interest rate that commercial banks in the United States charge their most creditworthy customers, typically large corporations. The prime rate is closely linked to the Federal Reserve's federal funds rate target and usually sits about 3 percentage points above it. Many consumer lending products such as credit cards, adjustable-rate mortgages, and home equity lines of credit are priced as a spread over the prime rate.
Example
“After the Fed raised rates by 25 basis points, the U.S. prime rate increased from 8.25% to 8.50%, immediately affecting variable-rate loan payments for millions of borrowers.”