NEW HAVEN, Conn. (CNN)– Be prepared to pay more. The federal reserve has raised its key interest rate by a quarter of a percentage point and it could have a direct hit on your bottom line. We are helping you stretch your dollar with what the rate increase means for your wallet and what you can do to prepare.
It’s just the third time rates have gone up since the financial crisis and more hikes may come this year so it’s better to know now what to expect so you can plan your money out. Higher rates have come back to America. One rate hike won’t change the world, but if you have a credit card, savings account, if you invest in stocks or bonds or want to buy a house or a car, you should probably pay attention.
Hate to say it, your credit cards will get more expensive. Credit card companies typically mirror the fed. So, chances are the interest rate you pay could rise soon. If you can, pay off your balances fast or transfer your balance to a zero-interest card to give you a little more time.
Car loan companies tend to do the same thing as credit card companies. Expect to see similar increases on that car loan rate. Likewise if you’re shopping for a new mortgage, even though the fed doesn’t directly set mortgage rates.
Don’t expect to see your savings account fatten. To start seeing more interest on your money, the fed will have to raise rates higher which it may do at least two more times this year.
If the credit card interest rate is a problem for you, and you want to find a new card, find one that has some great rewards or cashback perks.