What You Need to Know About Rising Interest Rates
Interest rates are going up. I thought I would write about the mechanics of what that means. Then I stopped and realized I wanted you to read the rest of the blog. So, let's just assume that I am right. Here is what you need to know:
Credit Card Interest rates
The problem: I really hate to tell you this one. Your interest rates on your credit card debt is probably going higher. By this time next year, it could be much higher. You have variable rates. That means that as interest rates go up or down so can your credit card rates. As you can imagine, don't ever expect them to go down. The greedy credit card companies will use every excuse possible to raise them.
Solution: You might want to look into some of the 18 months 0% interest offerings. Grant it, between fees and fine print they are not truly 0%. However, it can help at 0%. READ THE FINE PRINT!
The problem: Mortgage rates are on the rise. Consequently, the fantasy land of low interest rates is pretty much over. Bear in mind, we are spoiled because current rates are way lower than historical average - just saying.
Solution: If you are going to refinance, double check that it still makes sense. If it does, don't waste any time.
Fixed Interest Rate Investments
THE GOOD NEWS: Rates are slowly rising on money market accounts. Fixed guaranteed annuities are going up as well.
The Opportunity: Keep an eye on fixed guaranteed annuity rates. The best deal going right now is 4% for 7 years. This can make a good bond alternative. Remember as interest rates go up bond prices go down. BUYER BEWARE WITH ANNUITIES! These can be great additions to the conservative part of your portfolio. AT THE SAME TIME, you need to understand the fine print before you invest.
The low interest rate window is quickly closing. Take advantage of this change in interest rates while you still can!