How the Fed rate hike affects credit cards, mortgages, savings rates

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With the Fed announcing another rate hike Wednesday, borrowing costs will head even higher for consumers. The good news is some bank customers will start to see noticeably higher savings rates.Americans with credit cards, adjustable-rate mortgages and home equity lines of credit will see their monthly payments rise now that the Federal Reserve has lifted its key short-term interest rate by a quarter percentage point to a range of 1.75 percent to 2 percent.All are revolving loans with variable rates that are directly affected by the Fed’s move.Car buyers may feel it, too, though they’re still benefiting from a competitive auto loan market that’s keeping borrowing costs low. Any effect on 30-year mortgages and other long-term loans would likely be muted.But consumers with bank savings accounts and CDs will benefit.“While rising interest costs constrain borrowers … savers are finally getting their day in the sun,” says Greg McBride, chief economist of Bankrate.com.

 

 

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