How Interest Rates Affect You

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10 years ago


Interest rates can have a huge impact on your finances, especially if you carry a lot of debt.  Here’s some important information that can help you manage your money more successfully:

1. Mortgages. You may pay more as the rates go up if you have an adjustable-rate mortgage.  Financial advisers definitely recommend an adjustable-rate loan with a five or seven-year fixed period.
   
   
2. Home-equity line of credit. You can use your home-equity line of credit if you can pay off the amount you borrow within three years.  If you’re unable to pay off the amount in three years, obtain a home-equity loan with a fixed rate. For bank rates, go to www.bankrate.com.
   
   
3. Credit cards. When Federal Reserve rates rise, expect to pay more.  It’s best to pay off or pay down your credit card debt, or switch to a lower interest rate credit card, Go to www.cardweb.com for credit card rates.
   
   

 4.   Bonds. When rates go up, generally the yields on most bonds go up.  For your financial safety, invest in funds that hold Treasury and high-quality corporate bonds.