On December 16, 2015, the Federal Reserve increased interest rates for the first time in more than a decade. While higher interest rates will make things tougher for some, others will benefit. Here are 5 kinds of people who benefit from higher interest rates:
1. Savers seeking safety
The least-risky types of accounts — bank savings, credit union savings, and money market, to name a few — offer better yields when interest rates rise.
2. Vacationers abroad
When interest rates increase, the dollar’s value does too. So those vacationing abroad or buying foreign goods may get a boost in spending power by using dollars.
Those who depend on investment interest income for living expenses could see a little bit of relief if their interest rate rises and their investments increase in value.
4. Loan seekers
Higher interest rates mean lenders may find more reason to lend. So it could be a little easier than before for borrowers-to-be to become borrowers. But be careful — interest rates on those loans may rise too.
5. Credit ignorersIf you’ve been ignoring your credit, a rate hike may be just the spark you need to get in the know. Fortunately, TransUnion® makes it easy to stay up on your credit with:
• UNLIMITED TU score & report refreshes
• 3-Bureau monitoring & alerts
• 24/7, on-the-go access with our app
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What You Need to Know:
There are various types of credit scores, and lenders use a variety of different types of credit scores to make lending decisions. The credit score you receive is based on the VantageScore 3.0 model and may not be the credit score model used by your lender.
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