Here's a breakdown of what Wednesday's Fed decision means for your bank account, mortgage, credit card, student loan balance and car payment.
To the relief of many investors, the Federal Reserve kept interest rates steady for now. And that trend may continue. The Fed also indicated in a statement Wednesday that no more hikes likely will be coming this year.
In 2018, high-yielding savings accounts even outperformed the stock market for the first time in over a decade. On the flip side, a pause in rate hikes may mean a reprieve in escalating borrowing costs, which can impact your mortgage, home equity loan, credit card, student loan tab and car payment.Credit card rates are already at a record high of 17.85 percent, on average, according to Bankrate.
Tacking on a 25-basis-point increase, for example, would cost credit card users roughly $1.6 billion in extra finance charges, according to a separate WalletHub analysis. Because of the previous rate hikes, credit card users paid about $11.26 billion more in 2018 than they would have otherwise, WalletHub said.
Many homeowners with adjustable-rate mortgages or home equity lines of credit, which are pegged to the prime rate, are also affected when the Fed raises rates. While some ARMs reset annually, a HELOC could adjust within 60 days.
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