How to respond to rising interest rates
It's a safe bet that interest rates will go up again this year. The Federal Reserve has already signaled its intent to raise rates at least three times in 2018.
“Every time the Federal Reserve raises rates by a quarter point, you can expect to see that quarter point increase on your next credit card statement,” said Greg McBride, chief financial analyst at Bankrate.com.
McBride expects the average credit card interest rate to be around 17 percent by the end of the year and the average rate for a HELOC (home-equity line of credit) to hit about 5.85 percent.
"This is the time of year when we take a look at our overall finances and part of that has to be your strategy for debt repayment,” McBride said. “Consider that interest rates are rising, so that home- equity line of credit, that credit card debt, it's all becoming more expensive. Have a game plan for paying it down and ultimately getting out of debt."
On a positive note: We should see interest rates go up a little on savings accounts and CDs. McBride tells me he expects the best savings accounts will yield about 2.3 percent and the top five-year CDs should be just over 3 percent by the end of 2018.