As Prime Rate Climbs Higher, Your Interest Costs Won’t Be Far Behind

interest-rates-up-2If you owe money on student loans, credit cards, or home equity loans, you may soon find that your monthly payments are set to rise.

Many lenders peg the interest rate you pay off of the prime rate, and the prime rate – as measured by the Wall Street Journal after surveying prevailing rates at major U.S. banks – quietly moved up last week  from 3.5% to 3.75%.

That’s not a big change, but it does mean the interest rate you pay on most variable debt will start slowly climbing upwards.

So as we approach the New Year, it’s time to start thinking about your 2017 plan to manage and pay down costly credit card and other debt.

After all, if you’re piling on debt it’s normally because you are living beyond your means and spending money you really don’t have.

Otherwise, as your debt-servicing costs go up, you could find yourself squeezed with even less money to spend, and no way to save enough to keep your lifestyle on track for the future.

Got a home equity line of credit? Time to start thinking ahead about how to retire your debt before costs start to balloon.

 

About Mari Adam

Mari Adam, Certified Financial Planner™ and President of Adam Financial Associates Inc, has been helping individuals and families chart their financial futures for over twenty-five years. Have a question about your financial situation? Ask Mari!

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