3 Ways Rising Interest Rates Might Impact Your Wallet

What's Hot


2 Types of Black Marks Might Vanish From Your Credit File SoonBorrow

6 Ways the Obamacare Overhaul Might Impact Your WalletInsurance

7 Dumb and Costly Moves Homebuyers MakeBorrow

This Free Software Brings Old Laptops Back to LifeMore

Obamacare Replacement Plan Gets ‘F’ Rating from Consumer ReportsFamily

Beware These 12 Common Money MistakesCredit & Debt

21 Restaurants Offering Free Food Right NowSaving Money

17 Ways to Have More Fun for Less MoneySave

House Hunters: Beware of These 6 Mortgage MistakesBorrow

30 Household Uses for Baby OilSave

25 Ways to Spend Less on FoodMore

Nearly Half of Heart-Related Deaths Linked to These 10 Foods and IngredientsFamily

5 Surprising Benefits of Exercising Outdoors in WinterFamily

10 Ways to Save When You’re Making Minimum WageSave

Boost Your Credit Score Fast With These 7 MovesCredit & Debt

7 Painless Ways to Pay Off Your Mortgage Years EarlierBorrow

The Most Sinful City in the U.S. Is … (Hint: It’s Not Vegas)Family

The True Cost of Bad CreditCredit & Debt

10 Companies With the Best 401(k) PlansGrow

This Scam Now Tops ID Theft as the No. 2 Consumer ComplaintFamily

6 Stores With Awesome Reward ProgramsFamily

6 Ways to Save More at Lowe’s and The Home DepotSave

6 Healthful Treats for Your DogFamily

New Study Ranks the Best States in the U.S.Family

Thousands of Millionaires Moving to 1 Country — and Leaving AnotherGrow

Strapped for College Costs? How to Get the Most From FAFSABorrow

6 Overlooked Ways to Save at Chick-fil-AFamily

Ask Stacy: What’s the Fastest Way to Pay Off My Mortgage?Borrow

Where to Sell Your Stuff for Top DollarAround The House

8 Ways to Get a Good Price on a Shiny New AutoCars

Ask Stacy: How Do I Start Over?Credit & Debt

Secret Cell Plans: Savings Verizon, AT&T, T-Mobile and Sprint Don’t Want You to Know AboutFamily

30 Awesome Things to Do in RetirementCollege

14 Super Smart Ways to Save on TravelSave

The Rich Prefer Modest Cars — Should You Join Them?Cars

You’ll Soon Pay More to Shop at CostcoSave

10 Ways to Save When Your Teen Starts DrivingFamily

The Federal Reserve is expected to raise the target federal funds rate up to three times this year. Here's how you can prepare for those increases.

The Federal Reserve is expected to raise its target federal funds rate up to three times this year. In some cases, that can hit you right where it hurts most — in the wallet. But you can also benefit from a rate hike.

Currently, the rate sits in a range between 0.5 and 0.75 percent, after the Fed’s most recent hike on Dec. 14. The notion of three follow-up rate hikes in 2017 is simply a projection that could change at any time.

However, it’s clear that higher rates are coming, either sooner or later. Here are three ways a rate hike can affect your costs — and some suggestions for making the best of your situation.

Your mortgage costs might increase

If you are looking for a mortgage — or even if you already have one — your monthly expenses might be higher if the Federal Reserve hikes rates.

As we’ve explained before, mortgage rates do not move in lockstep with the federal funds rate:

If you are shopping for a fixed-rate mortgage, don’t expect drastic changes. Fixed-rate mortgages are not directly tied to the federal funds rate.

However, although there is no direct relationship, fixed-rate mortgages are likely to move higher over time as the federal funds rate increases.

If you already have an adjustable-rate mortgage that adjusts periodically, expect your monthly mortgage obligation to increase if the Fed continues to hike rates.

The bottom line: Mortgage rates remain near historic lows, and probably have nowhere to go but higher over the long term. So, the time to lock in to a good rate is likely right now.

You can search for the best mortgage rate in our Solutions Center.

For more advice, check out “9 Tips to Save Tens of Thousands on Your Mortgage.”

Rates on credit cards and HELOCs will adjust higher

If you have a credit card or home equity line of credit, your borrowing costs could rise each time the Federal Reserve hikes the federal funds rate.

That’s because the rates tied to these borrowing tools are variable and go up and down along with interest rate trends as a whole.

In recent years, you’ve probably gotten used to borrowing very inexpensively. But it appears those days are coming to an end.

The bottom line: Now is a great time to search for a better credit card rate. You can use our Solutions Center to find the perfect plastic.

If you’re already in credit card debt — and looking for a way to get out — we can point you toward a professional who will help you restore your credit. You can also look for an expert who will get collectors off your back.

And to steer clear of trouble in the future, check out “How to Avoid 5 Sneaky Credit Card Company Tricks.”

You might make more money on savings

So far, we’ve looked at the negative effects of an interest rate hike. But it’s not all gloom and doom. When the Fed hikes rates, the rates on savings accounts and CDs are likely to move higher as well. That means you’ll make more money on your savings.

The bottom line: It’s worth comparing rates on savings accounts and CDs in the weeks and months after a Federal Reserve rate hike. You can search for a better-paying option in our Solutions Center.

For more tips on growing your savings, check out:

How are you preparing for potential hikes in the federal funds rate? Sound off below or on Facebook.

Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!

💰🗣📰

Read Next: Ask Stacy: Why Is My Bond Fund Losing Money?

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 2,053 more deals!