Shield finances as interest rates rise
‘Question | Is there anything I can do with my personal finances to blunt the impact - or take advantage - of rising interest rates?
Answer | Absolutely.
Consumers with variable-rate debt are particularly vulnerable to rising interest rates, whether that debt is tied to a credit card, a home equity loan or a mortgage.
A good idea, experts said, is to refinance debt to lock in fixed rates before the cost of borrowing money goes up.
For example, the average fixed rate on a home equity line of credit these days is about 7 percent, compared with about 6 percent on adjustable rates. A year from now, depending on how aggressively the Federal Reserve raises rates, the adjustable line of credit may be set at more then 7 percent - and a year after that, perhaps higher.
“At the very least, have a plan in place now so that if the rate jumps you know what you’re going to do,” said Stephen Wetzel, a financial planner with Prometheus Capital Management Corp. in Yardley, Pa….’
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