How Increasing Interest Rates Can Benefit Consumers

To fight the high inflation hurting our wallets, the Federal Reserve hiked its key interest rate five times this year, raising its fed funds rate from near zero at the beginning of 2022 to 3.0%-3.25%.

The Fed plans more hikes in the coming months, potentially 4.5% or higher, resulting in higher consumer borrowing costs.

We will need to make some changes, and there are ways to benefit financially from a higher interest rate environment.

Why Are Interest Rates Rising?

The Fed reversed its monetary policy earlier this year, hoping to tame high inflation by discouraging spending and slowing economic growth.

Households tend to be the most interest-rate-sensitive sector. They already see higher mortgage, car, and credit card borrowing costs.

What Do Rising Interest Rates Mean For The Average Household?

As borrowing costs rise, they will postpone large purchases, become more significant savers, and earn income.

1. Save More Money 2. Boost Your Emergency Savings Fund 3. Keep Investing In Your Retirement Accounts

How Consumers Can Benefit From Rising Interest Rates

4. Prioritize Paying Off Debt, Especially Credit Card Balances 5. Reduce Discretionary Spending 6. Postpone Large Purchases

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