Anyone who has a student loan, mortgage, auto loans or credit cards most likely pays attention to interest rates. The slightest interest rate increase or decrease can be the difference between being able to keep up with a loan or mortgage and struggling to maintain a home or good credit. Anyone in Florida who has any kind of debt may want to investigate how an interest rate increase could affect his or her efforts to make progress with debt relief plans or hamper that progress.
According to reports, the Federal Reserve may be poised to begin raising interest rates this year. However, a major rise isn’t expected, but any kind of increase can have a ripple effect on just about anyone carrying debt. It is expected that the Fed may generate rate hikes in quarter-point increments.
The last rise in interest rates set by the Federal Reserve was in 2006. Rates have lingered at low rates since that time. The prime rate, which is what is referred to as the benchmark for consumer loans, has held steady at 3.25 percent. Credit cards will most directly feel the changes in rates.
Credit card debt has led many Florida residents to seek debt relief options of all sorts. While lower rates may help make credit card debt more manageable, any kind of credit card debt can make the debt relief process difficult or even impossible for some. For those who fear that interest rate increases could further impact their economic troubles, bankruptcy may be a viable option. Chapter 7 bankruptcy can result in the discharging of credit card debt, which can appease any fears of upcoming interest rate increases.
Source: detroitnews.com, “Be prepared for interest rates to increase“, Patricia Sabatini, Dec. 29, 2014