As consumer prices soar and the Federal Reserve is poised to raise interest rates, consumers should rethink their strategies for their credit cards and savings
Any efforts you make now to pay down debt and boost your savings will help you if the economy eventually stalls.Credit card interest rates are particularly sensitive to aggressive Fed interest rate hikes, according to McBride.
Borrowers are already seeing the effects of the central bank's March hike, with the average rate moving up to 16.43% from 16.34%, McBride said.If the Fed is particularly aggressive and raises interest rates by three percentage points in the next year-and-a-half to two years, your credit card interest rates will likely also increase by that amount over that time frame.
That way, you give yourself an 18- to 21-month runway to pay off your debt while also protecting that balance from rate increases.Online savings accounts are poised to be the most competitive to put your cash as interest rates go up. Certificates of deposit, which require you to lock in an interest rate for a fixed amount of time, should generally be avoided as rates rise.Mortgage interest rates are now at about 5% after a sharp run-up that began at the beginning of this year, noted McBride.For many borrowers, that may come as a shock.
Ireland Latest News, Ireland Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Asian markets mostly rise on interest rate, inflation hopesAsian shares were mostly higher Wednesday on hopes that the curbs on U.S. interest rates may moderate after new data showed signs of slowing inflation.
Read more »
Global stocks sink as traders await US inflation numbersBEIJING (AP) — Global stocks and Wall Street futures sank Tuesday as investors waited for U.S. inflation data amid unease about higher interest rates, Chinese efforts to contain coronavirus o…
Read more »
Why there are growing fears the U.S. is headed to a recessionWith inflation at a four-decade high, a growing number of forecasters worry the U.S. economy may be headed to a recession as the Fed gears up to raise interest rates aggressively:
Read more »
Bank of Canada Hikes Rates by 50 Bps, USDCAD Continues to March HigherThe Bank of Canada elected to raise its key policy rate by 50 basis points -- the largest hike in over two decades. The bank also revealed that quantitative tightening would begin April 25th, as it looks to tackle inflation now at three-decade high.
Read more »
CDC extends mask mandate for planes, trains until May 3The CDC has decided to extend the federal mask mandate for planes and trains until May 3.
Read more »
Mortgage rate spike boosts ARM demandWith the rise in mortgage rates along with the Federal Reserve increasing rates to curb inflation, the MBA sees mortgage originations slowing.
Read more »