![]() ![]() The best strategy is always to pay off as much of your existing balance as possible – and to do so on time every month – before the zero-rate period ends. Just be sure to find out what, if any, fees you will have to pay (e.g., a balance transfer fee or annual fee), and what the penalties will be if you make a late payment or miss a payment during the zero-rate period. “Less debt and more savings will enable you to better weather rising interest rates, and is especially valuable if the economy sours.” “That insulates you from rate hikes, and it gives you a clear runway to pay off your debt once and for all,” McBride said. Here's how to protect your money from a potential recession Home finances, investment, economy, saving money or insurance concept NATEE MEEPIAN/Adobe Stock If you’re carrying balances on your credit cards – which typically have high variable interest rates – consider transferring them to a zero-rate balance transfer card that locks in a zero rate for between 12 and 21 months.Ĭlose up bookkeeper or financial inspector hands making report, calculating. So you can expect to see a hike in your credit card rates within a few statements, McBride said.īefore the Fed’s rate hike Wednesday, the average credit card rate was 17.25%, up from 16.3% at the start of the year, according to. When the fed funds rate – also known as the overnight bank lending rate – goes up, it will push up various lending rates that banks offer their customers. Here are a few ways to situate your money so that you can benefit from rising rates, and protect yourself from their downside. ![]() “With inflation running north of 9%, we’re not at the finish line and there will be more interest rate increases to come in the months ahead,” said Greg McBride, chief financial analyst at. And more rate hikes are anticipated later this year. In its bid to beat back high inflation, the US central bank hiked its overnight lending rate another 75 basis points to a range of 2.25% to 2.50%. With the Federal Reserve’s interest rate hike on Wednesday – its fourth since March – consumers again face the question of where to park their savings for the best return and how to minimize their borrowing costs. Editor’s Note: This is an updated version of a story that originally ran on May 5, 2022. ![]()
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