Last month’s Fed rate hike may not be the last. Here’s where you may start feeling the increases.
1. Credit cards
Carry a balance? If so, you may notice the interest rate you pay is rising. That’s why it’s more important than ever to pay down credit card debt now. If the Fed keeps raising rates, borrowing may get even more expensive, making it even harder to pay off credit card debt.
If you have a variable-rate mortgage, your interest rate may have started increasing or it may increase with further rate hikes. And if you’re shopping around for a mortgage now, rates are likely higher than they would’ve been several months ago.
3. Student loans
Do rising interest rates affect your student loans? It depends. If they’re private loans with variable rates, chances are Fed rate hikes will eventually translate into higher rates, if they haven’t already. If your rate is fixed, it’ll stay that way even if the Fed raises rates. If you have Federal loans originated before 2006, they may have variable rates. Make sure to look at your specific loan terms for details.
Whether your rates are fixed or variable, high or low, based on revolving debt or installment loans, Fed hikes are a good reminder to manage your debt responsibly. When rates rise, the cost of borrowing goes up, so it’s an ideal time (if you can) to try to pay down debt with high and variable rates.
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