4 Ways to Prepare for Rising Interest Rates
Nov 3, 2022
iQuanti: The Federal Reserve raises interest rates to help combat inflation. In May of 2022, when the Fed raised its rate by half a percentage point, it was the biggest increase in 22 years. It's important to know what rising interest rates mean and how to be prepared for a Fed rate hike. Being prepared will help you to minimize any negative financial impact. Here are what rising interest rates mean and four ways you can prepare for them.
What do rising interest rates mean?
When the interest rate changes, it can have both a positive and negative effect on the market. While the stock market responds immediately to these changes, the full economic impact isn't seen until at least 12 months. When interest rates rise, it makes it more expensive to borrow money. Interest costs for credit cards, student debt, mortgages, car loans, business loans, and home equity lines of credit all increase. With higher mortgage rates, it's more difficult for consumers to afford home prices that have risen since the pandemic.
It causes consumers to start spending less, decreasing demand for goods and services and causing inflation to decrease. The positive side of an interest rate hike is that it causes savings rates to rise. This means that savers will start earning interest again. Nonetheless, it doesn't occur quickly, and saving rates will likely still be low.
How to prepare for the next Fed rate hike
Before the next Fed rate hike occurs, there are four things you can do to help yourself be prepared:
1. Pay down your credit card debt
Whenever the fed funds rate goes up, it increases the lending rates that banks offer to customers. The increased lending rates cause an increase in your credit card rates within a few statements. If you currently have a balance on your credit cards, look into transferring that balance to a zero-rate balance transfer card that's locked in for one to two years. It'll protect you from paying more due to rate hikes, making it easier for you to completely pay off your debt. More savings and less debt can put you in a better financial position to manage future rising interest rates.
2. Search for good savings yields
As mentioned earlier, when rates rise, savers earn interest on their accounts. Look for savings accounts with the highest yields and start saving regularly. CDs are a popular option since they have higher interest rates than other savings accounts and are federally insured. The account being federally insured means you're protected against loss if the bank fails.
3. Work on your credit score
With a higher credit score, you're more able to qualify for the lowest available rates on credit cards. That can help with offsetting the increased cost of borrowing. Be sure to continue paying your bills on time and avoid using more than 30% of your available credit.
4. Look for ways to increase your earnings
As rising interest rates cause the cost of living to rise, it's a good idea to look for more ways to increase your earnings. You can seek more education and training or pursue other means of increasing your skill set. Data from the Labor Department has shown that joblessness is lower for those with bachelor's degrees or higher. By taking these actions, you can help keep any negative financial impact from rising interest rates to a minimum.
Contact Information:
Keyonda Goosby
Public Relations Specialist
[email protected]
(201) 633-2125
Carolina Darbelles
Senior Public Relations Specialist
[email protected]
(201) 633-2125
Press Release Service by Newswire.com
Original Source: 4 Ways to Prepare for Rising Interest Rates
More News
Madonna Celebrates Daughter Lourdes Leon’s 30th Birthday With Touching Tribute: ‘We Are Two Side Sides of the Same Coin’
Lourdes Leon is 30! On Wednesday (October 14), Madonna took to Instagram to share a ton of throwback photos in […] The post Madonna Celebrates Daughter Lourdes Leon’s 30th Birthday With Touching Tribute: ‘We Are Two Side Sides of the Same Coin’ appeared first on Just Jared - Celebrity News, Entertainment News & Photos.
Teddi Mellencamp gets honest about her plastic surgery amid stage 4 cancer battle
Teddi Mellencamp gets honest about her plastic surgery amid stage 4 cancer battleTeddi Mellencamp is defending the plastic surgery she underwent amid her stage 4 cancer treatment.On Tuesday, the Real Housewives of Beverly Hills alum took to her Instagram account and gave a peek into her...
Halle Berry and Olivier Martinez at odds over son's testimony
Halle Berry and Olivier Martinez at odds over son’s testimonyHalle Berry is asking the court not to require her 13-year-old son, Maceo, to testify in her custody dispute with ex-husband Olivier Martinez.Berry, 60, reportedly wrote in court documents that testifying would put Maceo “at...
Elizabeth Hurley fuels engagement rumors with new diamond ring
Elizabeth Hurley fuels engagement rumors with new diamond ringElizabeth Hurley has sparked engagement speculation.The actor, who is currently filming season two of the mystery-comedy TV series The 'Burbs, has made headlines after she shared some behind-the-scenes pics in which she was wearing a...
Hilary Swank announces third pregnancy in surprise Instagram post
Hilary Swank announces third pregnancy in surprise Instagram postHilary Swank is expecting her third child with husband Philip Schneider.The 52-year-old actress announced the exciting news on social media on Wednesday.The post included an engaging clip of the Swank family dancing in the dark...
Alexander Skarsgard Wears ‘Lick My Worm’ T-Shirt to ‘Wicker’ Screening in NYC, Gets Support from Dad Stellan Skarsgard
Alexander Skarsgard has the support of his dad on the red carpet! The 50-year-old Emmy-winning actor was joined by dad […] The post Alexander Skarsgard Wears ‘Lick My Worm’ T-Shirt to ‘Wicker’ Screening in NYC, Gets Support from Dad Stellan Skarsgard appeared first on Just Jared - Celebrity News, Entertainment News & Photos.
Reese Witherspoon's ex Ryan Phillippe recalls 'wild night' with her during 2006 Oscars
Reese Witherspoon's ex Ryan Phillippe recalls 'wild night' with her during 2006 OscarsReese Witherspoon ex husband Ryan Phillippe is looking back at "out-of-body, out-of-mind experience" while attending the 2006 Oscars with his then-wife.Speaking on Live with Kelly and Mark, the 52-year-old...
Ryan Phillippe Shares Rare Comments About Ex-Wife Reese Witherspoon, Recalls ‘Wild Night’ After Her Oscars Win
Ryan Phillippe is looking back at a “wild night” with ex-wife Reese Witherspoon. If you forgot, the 52-year-old 9-1-1: Nashville […] The post Ryan Phillippe Shares Rare Comments About Ex-Wife Reese Witherspoon, Recalls ‘Wild Night’ After Her Oscars Win appeared first on Just Jared - Celebrity News, Entertainment News & Photos.
Selena Gomez shares how she celebrated first wedding anniversary with Benny Blanco
Selena Gomez shares how she celebrated first wedding anniversary with Benny BlancoSelena Gomez has finally revealed how she and her husband, Benny Blanco, celebrated their first wedding anniversary.Speaking to Extra at fourth annual Rare Impact Fund Benefit event, the 34-year-old singer shared...
'Chronicles of Narnia' star Ben Barnes ties knot with Aubrey Cleland
'Chronicles of Narnia' star Ben Barnes ties knot with Aubrey ClelandThe Chronicles of Narnia star Ben Barnes has confirmed his marriage to actress Aubrey Cleland.After Page Six reported Ben's nuptials, the Dorian Gray star announced via his Instagram account on Wednesday that he and the...
Kendall Jenner Opens Up About Her Sexuality, Says She ‘Wouldn’t be Opposed to Having Some Fun With a Girl’
Kendall Jenner is sharing some rare comments about her love life and sexuality. In the Thursday (October 15) episode of […] The post Kendall Jenner Opens Up About Her Sexuality, Says She ‘Wouldn’t be Opposed to Having Some Fun With a Girl’ appeared first on Just Jared - Celebrity News, Entertainment News & Photos.
Anna Gunn breaks silence on 'Breaking Bad' co-star RJ Mitte's untimely death
Anna Gunn breaks silence on 'Breaking Bad' co-star RJ Mitte's untimely deathAnna Gunn has finally broken the silence on the shocking death of her Breaking Bad co-star RJ Mitte.In a statement shared with People magazine, the 58-year-old actress recalled her time working with Mitte on the hit...
Recommended
‘Friends’ Returning To Channel 4 After 15 Years
YOUR NEWS, OUR NETWORK.
Do you have Great News you want to tell the world?
Be it updates about your business or your community, you can make sure that it’s heard by submitting your story to our network reaching hundreds of news sites across 6 verticals.