It seems like Federal Reserve is itching to increase key interest rate this month. In general, it is expected that the rates will rise over coming years. The consumers can take some action steps in order to insulate or protect themselves as the rates start to climb from rock bottom low levels which we have been used to since last few years.
Do not waste time. Grab 0 percent balance transfer and the promotional introductory offers right now, when one still can, as availability of such teaser deals is eventually going to diminish.
Last time when rates were raised by Fed, in 2006 June:
- Final season of Sopranos was going on.
- Apple iPhone was still one year away.
- Cost of one movie ticket on average was $6.5.
- Barrack Obama had not yet said that he would run for the president.
- Justin Bieber had not been discovered.
If you can, then shed the variable-rate debt
Be wary of the other debts of variable rate such as the home equity line of credit (HELOCs) or some private student loans which carry the variable rates. You should try to pay such debts now or you should try to refinance them into fixed rate. You might even be allowed by some lenders to fix interest rate on outstanding portion of the home equity in order to protect against rising rates.
And in case you have mortgage of adjustable rate which could be adjusted upward, now is an excellent time of unloading it and refinancing into fixed rates. Otherwise, continuous increase in interest rates could produce nasty increases in payments a couple of years down the road.
Still looking for more? Feel free to check out our comprehensive personal finance guide to learn more about managing your budget and staying financially healthy.