The Impact of Fed Interest Rate Hikes on Your Finances

The Federal Reserve has raised its benchmark interest rate to 5.1%, which will result in higher loan costs for consumers and businesses. Credit card debt has already reached a record high, and the latest increase will likely raise the APR on credit cards by 0.25%. However, some banks are now offering higher rates on savings accounts. Higher mortgage rates could put home ownership out of reach for some, while rising loan rates and lower used-vehicle trade-in values have erased much of the savings on monthly payments for cars. Borrowers who take out new private student loans should also prepare to pay more as rates increase.