October 02, 2022
What Do Rising Interest Rates Mean for You?
In an effort to cool an economy that was growing rapidly and causing levels of inflation that hadn’t been seen since the 1980s, the Federal Reserve has raised interest rates to levels it hasn’t been at since 2008 during “the great recession.”
While it can be rough news for people looking to secure loans for homes or vehicles, there are other impacts that a rise in the overall interest rate can have on you.
CHC has three ways that rising interest rates can affect you.
- Saving Money
If you’re looking to invest, a rise in rates gives you more attractive options. While the economy boomed over the past decade, interest rates for CDs and high-yield savings accounts were virtually at zero. Now, they are becoming more attractive options as banks are offering better rates on these types of accounts.
- Selling a Home
Even with higher rates, if you’re looking to downsize or sell a loved one’s home who is transitioning into senior care, it’s still a seller’s market out there. If you happen to be looking to buy, now is not the time to choose an adjustable-rate mortgage. Get a fixed rate so there are no surprises, and you can always refinance when rates drop.
- Credit Card APR
The annual percentage rate (APR) on credit card debt has risen as interest rates have—from 16% in early 2022 to around 19% in the fall. If you’re one to carry a balance on your card and only make the minimum payments, your overall balance is going to go up from finance charges.