time the Federal Reserve raised interest rates, Barack Obama was a U.S.
senator, but many gurus who watch the Fed say that a number of factors suggest
we're due for a rate hike sometime within the next few months. If the Fed
raises interest rates, it will mean a raise in the price of any new loan you
take in the future as well as an increase in how much you pay every month on
the adjustable-rate loans you already have. So, even if the discussion
leaves you yawning, it's important to act quickly if you think the Fed will
raise interest rates. That's because taking the right actions before a rate
hike can save you thousands of dollars in interest payments after the rate
hike. Here are some tips to protect yourself, save money and maybe even
make a profit if interest rates go up this year:
If you have a high credit card balance, move it to a loan with a low, fixed rate.
card rates have remained around 13 percent, on average, for several years, but
a Fed hike would raise those rates. To make matters worse for people with
sizable credit card debt, those rates compound quite quickly on a revolving
account like your credit card.
to deal with your credit card debt is to move your balances from the cards you
have now to a single low-interestcard from Tucoemas.
think you're ready to move your credit card debt onto a single, low-interest
card apply online here.
have more credit card debt than you feel comfortable paying off with another
card, you might consider a home equity loan. Home equity loans have a
low, fixed rate, so you can avoid an interest rate hike and save money in
interest payments every month. While it might seem a little scary to
borrow against your home equity, if you have accumulated significant credit
card debt, your home might be the only source of wealth you can borrow against
to cover it. The loan payments should be less than you're paying your
credit card companies every month, so you'll find it much easier to make your
payments and get out of debt.
interested in using your home equity to get out of credit card debt, you can
start the application process or find out more by calling our home equity specialists at (559)
If you were planning on buying a house (or refinancing) soon, it's time to make
mortgages will be unaffected by any interest rate hikes the Fed might employ,
so if you think a rate hike is coming, get your mortgage now. The
difference of a few percentage points in the federal rate could mean mortgage
payments increasing by as much as hundreds of dollars per month for some
homeowners. Avoiding that fee is as simple as getting the paperwork for a new
home loan finished before a rate hike occurs.
wanted the extra few months to bulk out your down payment, or you weren't sure
about refinancing this summer, it's time to sit down with a professional who
can take you through the numbers and find out how much that decision might
You can talk
to one of our mortgage specialist by calling (559) 737-5780 or visit our website for more information.
you're investing, it's time to look at conservative options.
as the Fed kept interest rates low, it was a good idea to invest more heavily
in stocks than investment products offered by financial institutions. Low
rates meant easy loans to businesses and expansion was easy, so it was driving
up stock prices. As rates go up, credit markets slow down, and expansion
becomes less profitable for all those corporations in which you own shares.
same time, as the prime interest rate goes up, so does the return you'll enjoy
on your money market account, savings certificates (or CDs), or any of a
variety of investment products you may have. Find out what we can do to
put your money to work by checking out our CDs and IRAs. If you're trying to get some money put
together for college or retirement, don't forget about our 529 and IRA
knows for sure what Janet Yellen is going to do. Predicting the Fed's rates
is a big-money business for a lot of powerful institutions. In the end,
you're going to have to decide if you want to leave your money in places where
a rate hike could increase your costs, or put it into more stable products.
If you aren't sure what to do and want guidance, feel free to call or
come by, we'd love to help you understand your options.