Advertisement

SPENDING SMARTER: Federal interest rates on the rise & how that affects you

*NOTE: This is a stock photo.
*NOTE: This is a stock photo.(Pexels/U.S. Government)
Published: May. 6, 2022 at 12:55 PM CDT
Email This Link
Share on Pinterest
Share on LinkedIn

SHREVEPORT, La. (KSLA) - Expect to pay more on interest rates. On Thursday, May 5, the Federal Reserve raised interest rates by 0.5%. Some experts believe it could raise another 1.5% by the end of 2022.

That’s not good news for people looking to buy a home. Add in limited supply on available homes across the country, and you could be in a big bind if you’re trying to find a new home.

Things aren’t any better if you’re looking to buy a car or if you use your credit card.

Here’s a breakdown of how these increases affect you:

  • For every 0.5% interest rates rise, that will cost you $50 for every $10,000 you borrow
  • If you buy a home for $200,000, that’s an extra $1,000 per year you’re paying in additional interest alone
  • When it comes to your credit card, you’re going to see increases to rates on your bill, likely within your next billing cycle

Some ways to combat the added costs: check into zero or low-interest credit cards. You can even transfer your current balance to a card with these options.

You can also contact your credit card company and ask for a lower rate. Those companies agree to lower rates more often than you think, since they want to keep your business.

Copyright 2022 KSLA. All rights reserved.