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If you have any high-interest consumer debt such as credit cards, now might be a good time to start paying it off. Due to current inflation, interest rates are expected to rise this year. The federal funds rate set by the central bank influences the prime interest rate. The prime interest rate is what lenders use to determine what you will pay in interest for credit cards and other loans. When the federal funds rate rises, the prime interest rate usually follows. Here are some tips to combat rising interest rates:
- Refinance mortgage or private student loans
- Pay down debt, especially credit cards
- Try to improve your credit score for better rates
- Keep credit card usage low
- Avoid missing payments
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