National nonprofit American Consumer Credit Counseling shares what to know about higher interest rates.
Boston, MA – March 1, 2017
After the Federal Reserve raised interest rates for the second December in a row and set a plan for several rate increases in 2017, concern has grown among consumers worried about how the hikes may impact their personal finances. In response to the interest rate increase, national nonprofit American Consumer Credit Counseling shares important information about what consumers should know – positively and negatively – about the changes.
“A strengthening and growing economy is usually accompanied by higher interest rates to avoid inflation,” says Steve Trumble, President and CEO of American Consumer Credit Counseling, which is located in Newton, MA. “It’s vital that consumers understand what rising interest rates mean and how they can impact their finances and outlook.”
According to a recent survey by Bankrate, almost half the respondents (49 percent) said they were concerned about the effects of rising interest rates compared to the 41 percent who voiced this same concern in 2016. Respondents biggest concern regarding the rise in interest rates is the economy and stock market (21 percent) followed by personal finances (18 percent).
American Consumer Credit Counseling provides consumers with a list of pros and cons regarding higher interest rates.
Pros:
- Savers have the opportunity to earn more interest on the money they have saved in the bank.
- More interest means more retirement savings for retirees to live off of.
- The US dollar becomes stronger and gives Americans traveling abroad the power to buy more and may continue to strengthen as the Federal Reserve raises the rates in 2017.
- Although a raise in interest rates leads to higher mortgage rates, this could help first time homebuyers by bringing the housing prices down.
Cons:
- Lending is impacted because the cost of borrowing rises
- Because a mortgage is such a large sum of money even a small increase can lead to thousands of added dollars for buyers.
- A rise in interest rates can significantly increases costs and money owed for those who carry a balance on their credit card.
- People tend to save their money when interest rates are high rather than spending on big purchases – affecting consumers, businesses and the overall economy
ACCC is a 501(c)3 organization that provides free credit counseling, bankruptcy counseling, and housing counseling to consumers nationwide in need of financial literacy education and money management. For more information, contact ACCC:
- For credit counseling, call 800-769-3571
- For bankruptcy counseling, call 866-826-6924
- For housing counseling, call 866-826-7180
- Or visit us online at http://www.ConsumerCredit.com
About American Consumer Credit Counseling
American Consumer Credit Counseling (ACCC) is a nonprofit credit counseling 501(c)(3) organization dedicated to empowering consumers to achieve financial management through credit counseling, debt management, bankruptcy counseling, housing counseling, student loan counseling and financial education concerning debt solutions. In order to help consumers reach their goal of debt relief, ACCC provides a range of free consumer personal finance resources on a variety of topics including budgeting, credit and debt management, student loan assistance, youth and money, homeownership, identity theft, senior living and retirement. Consumers can use ACCC’s worksheets, videos, calculators, and blog articles to make the best possible decisions regarding their financial future. ACCC holds an A+ rating with the Better Business Bureau and is a member of the National Foundation for Credit Counseling® (NFCC®). For more information or to access free financial education resources, log on to ConsumerCredit.com or visit https://www.consumercredit.com/debt-resources-tools/
