Yep! Most likely the interest rate on your credit card, HELOCs or any other variable consumer lines of credit just went up this month. Why?!? In short…. The Federal Reserve Bank.
Borrowing money just got a little more expensive.
Every month the Federal Reserve gathers to go over how the state of economy at home and aboard, and how it impacts the US. All of which is talked about in super choppy, confusing language. Super exciting, right? For the last 10 years, the United State’s Federal Fund Target Rate(the rate at which the Fed lends money) has been near 0. This is the main reason your bank account has been paying you almost nothing in interest each month, but conversely the reason why interest rates in financing a house is low as well. A lot of things are influenced by this number. Maybe not directly, but in some way.
The bottom line is as of December 16, they got together again where the rate increased to 0.25 from 0. Most of the credit card and other interest rates increased the same amount. All told, this isn’t a big move. You’ll hardly see much of an impact for your credit cards. But! This should get you thinking about your debt. Is there a little? …A lot? The rates are most likely to continue increasing so get a plan and start saving and paying off the debt. Shed the debt and get excited about interest rate hikes for increasing the checking account rates!
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