January 1, Plan on These 3 Things Getting More Expensive After the Fed’s Massive Rate Hike

The Federal Reserve raised its federal rate by half a percentage point this week — marking the largest hike in 22 years. The rate is expected to land somewhere between 3% and 3.25% by the end of 2022.

The historic increase makes it more expensive to borrow money, which is meant to reduce inflation.

Here are three of your regular payments that are about to get more expensive:

Credit Cards
You’ll likely see a slight increase in your credit card’s interest rate within the next few billing cycles.

Mortgages
“All signs point to higher rates,” said Greg McBride, Bankrate’s chief financial analyst. “In May, the benchmark 30-year fixed mortgage rate will be between 5.5 percent and 5.75 percent for the first time since 2009, and even 15-year fixed rates will climb to around 4.75 percent to 5 percent.”

Other types of loans
The amount by which your loan’s interest rate will increase depends on your credit score and the agreement’s fine print.

If you have a fixed-rate loan, you won’t see a change. Otherwise, if you have an adjustable-rate loan, you should look over its terms.

“The last thing you want is to think, ‘Oh, I have a few months before my rate goes up,’ and realize that the rate hike will kick in much sooner,” said Jacob Channel, a senior economic analyst at LendingTree.

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3 things that will get more expensive after the Fed’s historic rate hike