Fed Rate Hikes – What does it mean for you?
As the US economy keeps growing and showing signs of strength, the Fed has been keeping tabs and gradually raising rates in an effort to manage the growth and prevent the economy from overheating.
Basically this is a way for the Fed to help balance the growth for things like goods and services as well as jobs, but at the same time keep inflation in check so that the economy stays on a sustainable growth path. That’s nice, but what does that mean to you, the individual consumer?
Essentially it means that there are both costs and benefits when rates rise. For someone who considers themselves a saver, this is actually good news. You’ll start to see an increase in interest rates for things like CDs and Money Market accounts, which will create a better yield. It’ll probably take a little leg work to find these opportunities, but most of them will likely pop up first in smaller community banks and credit unions. And by the way, did you notice we’ve just increased our Share Certificate rates?
Borrowers, however, may have to dig a little deeper. Adjustable rate mortgages and HELOCs will both see an increase in monthly payments, so this could be a good time to see if refinancing to a fixed rate loan makes sense for you. Both fixed rate mortgages and home equity loans could be valuable solutions in this case, and NECU can help with both options!
Credit cards will see the fastest effects of a Fed rate hike because most credit card issuers will pass any rate hikes straight through to the consumer as soon as they go into effect, thereby quickly increasing your monthly payment.
Good news though! At NECU you can have card confidence knowing that we’re holding our current variable Visa® credit card rates steady, at least for the rest of 2018. Can your other cards say that? Compare them and then apply for an NECU card today!