Understanding An Interest Rate Hike

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WHAT YOU NEED TO KNOW

In late 2015, the Federal Reserve voted to raise interest rates for the first time in almost a decade. Here we are half way into 2016 and the Fed is thinking seriously about raising its benchmark interest rate again. So, what does all this mean, and how will it affect you? A lot depends on whether you are a saver, or whether you need to borrow.

If you are a saver, having interest rates rise after being low for so long will help your money grow. On the other hand, if you have credit card debt or if you need to borrow money, having interest rates rise can make things more difficult.

Here are some things to consider as consumers:

For Consumers

  • Increase in price of new loans
  • Increase in adjustable-rate mortgage payments
  • Higher credit card interest payments
  • Higher credit card minimum due payments
  • Higher interest paid on savings accounts
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    Below is a nifty infographic which will help you understand interest rates and what you can do to prepare for the next rate hike.

    Understanding Interest Rates

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