What is the Federal Reserve System?
The Federal Reserve System or more commonly referred to as the FED, is the central banking system of the United States of America. Their primary function, among many other duties, is to stabilize our financial system. In summary, the FED works to prevent economic crisis in the United States.
Why are they raising rates?
As of 2022, the FED will slowly raise Federal Funds Rates, also known as Interest rates, as the year progresses. By increasing the rates, the Fed hopes to deter inflation in the market.
Where can you save?
Many know that the price of anything from food to gas has been noticeably rising. By increasing rates, inflation will, in turn, drop, saving you money in the places it has been hitting you daily.
What will it cost you?
When raising rates brings down inflation and stocks, it also raises the cost of borrowing. This means Auto Loans, Credit Cards, and even Mortgages will become more expensive for borrowers as the APR increases.
While a few extra percentage points on your loan’s APR might not look like a big deal, it can truly cost you more money than it might seem.
If you haven’t already, consider refinancing your current loans while rates are still low. By refinancing, you can save money on your loans by lowering your rate or changing the loan term. For other loans, such as Mortgage Refi’s, you can take cash out of your equity when refinancing to save on your monthly payments while using that extra money to pay for things you might need.
As always because we are a credit union and not paying a board of directors with fees, our rates will continue to be competitive to help members save money on borrowing money when they need it.