Impact of Fed’s interest rate hike on your wallet

DENVER -- The Federal Reserve did it again, raising the interest rate 0.25 percent.

"The simple message is the economy is doing well," Federal Reserve Chairwoman Janet Yellen said Wednesday.

So what does that mean for your wallet?

"It actually impacts those with debts the most," said Kim Curtis, CEO of Wealth Legacy Institute. "A consumer with debt, I would do absolutely whatever we could to reduce that balance."

Car Loans

A $20,000 car loan is estimated to cost $36 more a year.

Credit Cards

New debt of $1,000 could cost more than $20 a year more

Mortgages

A 30-year mortgage for a $300,000 house might be more than $300 in payments annually.

Savings

Savings accounts generally result in higher returns, but Curtis is pessimistic the consumer will ever see the benefit.

"I think the last place we are going to see the rate increase is in our savings account," Curtis said.

Tips

  • Pay off balances if you can
  • Look into zero interest credit cards
  • See if home equity use would be a cheaper option
  • Make big purchases now if possible -- it will typically take a while for the new rates to kick in