For several years now, we’ve enjoyed the lowest interest rates in many decades. However, the Federal Reserve recently revealed plans to increase rates this year gradually. So how might this affect your finances?
The federal funds rate, which the central bank sets, is the overnight interest rate at which banks borrow from one another. It also influences the prime interest rate, which lenders use to determine how much interest you’ll pay on credit cards, mortgages, and other loans. So when the federal funds rate goes up, the prime rate tends to follow.
CNBC has written a very informative article about four ways to prepare for higher rates. To learn more, Click Here.