As the months continue to pass interest rates continue to rise as the federal reserve attempts to stave off some of the wild inflation that has taken a grip across the country. With prices rising several percent across the board year to year, if interest rates keep rising the financial options at your disposal will continue to change. To set yourself up for the long term, you need to start acting now and get a few things done before rates rise again. Here are three moves that you need to make before rates rise further.
Pay Down Credit Card Debt
The first thing that you should do to set yourself up before rates rise further is to pay down your credit card debt now. According to The Balance, the interest rate you pay on your credit card is variable over time, and most people aren’t aware that this happens. As the base rate changes (the base rate is what the federal reserve adjusts) so too does your credit card interest, but usually at a much faster rate. If you are carrying around balances on your credit cards, now is the time to pay those balances off to avoid even larger interest payments down the line.
Refinance Your Mortgage
Another critical move to make before interest rates rise further is to refinance your house. When you buy your house with a mortgage loan, you usually lock yourself into a fixed interest rate loan. But if your current interest rate is higher than the mortgage rate you could qualify now, this is the time to refinance. If current rates are lower than your mortgage rate, Equihome Mortgage reminds us that refinancing can save you money. The key is refinancing before rates rise and you can’t get lower interest, so be sure you are taking action right away to make a difference.
Buy A Car
The final move that you should make before rates rise any further is to buy yourself a car. If you are nearing the time for a new vehicle in your life it is probably in your best interest to purchase now. This is especially true if you are planning to lease a car, as the interest rates will impact the monthly price you pay. Cars often require loans too, so keeping that interest rate low is also crucial.
Interest rates are still climbing, and it doesn’t look like they’re going to stop anytime soon. To prepare yourself for this, make these three moves that will help you avoid the negative impact of higher interest rates. Doing so will save you money in the long run and give you more financial flexibility.
Check out this article on when you need a lawyer to help with financial matters!