Take Stock Of Finances As Fed Raises Rates

ROCKVILLE, MD. — The Federal Reserve’s decision to raise its benchmark interest rate one-quarter point in June signals a trend for steady rate increases over the coming years. But while the initial rise in interest rates has not significantly affected the rates consumers’ pay for credit cards, mortgages, and auto loans, continuing rate increases could make credit more expensive. At this time experts recommend taking stock of your personal finances and performing a financial checkup before rates climb higher.

“Many people don’t have a firm grip on their money and don’t know where they stand financially,” said Pam Rhode, president of Myvesta, a nonprofit consumer education organization. “This is the perfect opportunity to examine the interest rates you are currently paying and to get up to speed with everything going on in your financial life.”

According to a survey conducted by Myvesta, almost 43 percent of Americans do not know the interest rates on their credit cards, and more than 23 percent do not review their credit card statements each month.

“Many credit cards have different interest rates for regular purchases, cash advances, and balance transfers,” Ms Rhode said. “For those with variable rate cards the interest rates could be going up without your knowledge, costing you money and lengthening the time it takes to get out of debt. Even the interest on fixed rate cards can be raised as long the card issuer provides you with 15 days written notice.”

Ms Rhode says this is also a perfect time to review a consolidated copy of your credit report.

“Most credit reports contain some form of inaccurate information and reviewing your credit report from each of the three major credit bureaus is an extremely important part of any financial checkup,” Ms Rhode said. “By reviewing a consolidated copy of your credit report you can view what Experian, Trans Union, and Equifax are reporting about you, all in an easy to read, side by side format.”