The Federal Reserve raised its key rate by a quarter point Wednesday, bringing it to the highest level in 15 years as part of an ongoing effort to ease inflation by making borrowing more expensive.
Wednesday, bringing it to the highest level in 15 years as part of an ongoing effort to ease inflation by making borrowing more expensive.
“It’s already been a really rough year with folks with credit card debt, and it’s only going to get worse,” said credit analyst Matt Schulz of LendingTree. “The immediacy of the increase is what’s hard — that it affects not just future purchases but current balances.” . But longer-term loans of more than four payments that these companies offer are subject to the same increased borrowing rates as credit cards.
Though savings, CDs, and money market accounts don’t typically track the Fed’s changes, online banks and others that offer high-yield savings accounts can be exceptions. These institutions typically compete aggressively for depositors. Sales of existing homes have declined for 11 straight months as borrowing costs have become too high a hurdle for many Americans who are already paying much more for food, gas and other necessities.If you’re financially able to proceed with a home purchase, you’re likely to have more options now.With shortages of computer chips and other parts easing, automakers are producing more vehicles. Many are even reducing prices or offering limited discounts.
Financing a new vehicle, with an average price of $48,516 as of December, now costs $8,769 in interest, Drury said. That’s enough to chase many out of the auto market.
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