The Federal Reserve is expected to raise rates on Wednesday.
The first quarter-point increase in the federal funds rate in three years will likely lead to more hikes.
The cumulative effect of rate hikes is what is going to have an impact on the economy and household budgets, according to Greg McBride, Bankrate.com's chief financial analyst.
Consumers will spend less as borrowing costs rise. If you are concerned about what this means for your own credit card debt, auto loan, mortgage rate and student loan tab, here is a breakdown of what may happen.
Most credit cards have a variable rate, which means there is a direct connection to the Fed's benchmark.
Credit card rates are currently around 16.3%, down from a high of 17.85%, but expect your annual percentage rate to rise when the Fed makes a move.
A single quarter-point rate increase isn't likely to change things. The rate hikes are bad news for people with credit card debt.
Personal Finance says high inflation points to bigger Social Security cost-of-living adjustment.
A zero-interest balance transfer credit card is the best option for borrowers with revolving debt.
He said that it was a great opportunity to get out of debt.
A Fed interest rate change won't have an effect on the rate you get for a new car.
A quarter percentage point difference on a $25,000 loan is $3 a month, according to Bankrate.
Finding something in your price range is the greatest barrier to buying a car.
Long-term fixed mortgage rates are going up since they are influenced by the economy and inflation.
The average 30-year fixed-rate home mortgage has risen to 4.14%, up a full percentage point since November, and is likely to keep climbing.
Many homeowners with home equity lines of credit, which are pegged to the prime rate, will also be affected. A home equity line of credit, or HELOC, can be adjusted immediately rather than once a year.
Mark Scribner, managing director of Oxygen Financial in Boston, said that a lot of people haven't tapped their home equity line for improvements.
Federal student loan rates are fixed, so most borrowers won't be affected by a rate hike immediately. If you have a private loan, it is possible to have a fixed or variable rate, which means that you will pay more in interest as the Fed raises rates.
It's a good time to identify the loans you have outstanding and see if you can get a better deal on them.
If you have private loans, you should be able to get a lower rate.
The Fed's rate increases will have a slower effect on deposit rates.
The Fed has no direct influence on deposit rates, but they tend to be related to the federal funds rate. The savings account rate at some of the largest retail banks has been hovering near rock bottom.
Money in savings loses purchasing power over time because the inflation rate is much higher than this.
Yiming Ma is an assistant finance professor at Columbia University Business School.
You should look for other options with better rates.
Ken Tumin, the founder of DepositAccounts.com, said that the average online savings account rate is considerably higher than the average rate from a brick and mortar bank.
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