Law Office of Ginger C. Cord, PSC. - Bankruptcy
Free Initial Consultation

Local 859-963-2073

Toll Free 800-762-6916

Call Today

Pursue A Bright Financial Future
[an error occurred while processing this directive]
Freedom From Debt Is On The Horizon

How interest rate hikes will increase some monthly payments

On June 14, the Federal Reserve raised the federal funds rate, and this means that monthly credit card payments will go up as well. Some homeowners and people with car loans may also be affected. Furthermore, it is expected that there will be another rate hike later in 2017. These hikes could continue in 2018 and 2019.

The average interest rate for credit cards is just above 15 percent. This means that if a person has a balance of $5,000, an interest increase of a quarter point will make the total interest go up to around $175. However, planned increases through 2019 could bump that up to $525 each year.

For homeowners with home equity loans, a quarter point will mean $6 more monthly on $30,000 worth of credit while three increases annually will be $18 per month extra. Mortgage rates may initially go up around $30 per month for a $200,000 mortgage and $180 per month after three rate hikes a year by late 2019. The monthly payment for car loans could increase around $9 monthly on a $25,000 car, but competition means some lenders may keep rates low.

For people who have large debts or who are already struggling to make their monthly payments, these increases could be significant. Falling behind in payments could mean calls from creditors, stress and additional late fees tacked onto existing debts. People who have debts they cannot pay off in a few years may want to talk to an attorney about debt relief options including bankruptcy. Even with a Chapter 7 bankruptcy, a person is allowed to keep some assets exempt. Furthermore, filing for bankruptcy stops creditor harassment and can bring peace of mind and a fresh start.

No Comments

Leave a comment
Comment Information