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Look for small hikes in interest rates this year

Financial experts say you'll see immediate effects
Look for higher interest rates in 2022
Posted at 12:30 PM, Jan 04, 2022
and last updated 2022-01-04 13:34:08-05

WASHINGTON, D.C. — The federal reserve is signaling it will increase interest rates this year to combat rising inflation.

Those rate hikes are expected to be small - only a quarter to a half percent at a time.

Still, financial experts say you'll start seeing the impact right away, particularly on items like credit card debt where you'll often see the rate increase within one or two statement cycles.

Experts say there are some moves you should think about making to prepare.

"This is the time to act aggressively by paying down and paying off that debt before it becomes costlier as rates rise," said Greg McBride, chief financial analyst for Bankrate. "If you have good credit take advantage of those zero percent and other low rate balance transfer offers the ability to transfer the balance to one of those low rate cards.

"You do two things. One, you give yourself this runway to get that debt paid off once and for all. But in the meantime you're also insulating yourself from higher interest rates."

And if you've been considering re-financing your mortgage, experts say now is the time to act quickly.

Consumers have the potential to cut their monthly payments by $100 to $200 a month.

Experts are predicting inflation to stay above what we've been used to for years.