SALT LAKE CITY — The Federal Reserve has kept interest rates at record lows for over six years, but financial analysts warn that's finally going to have to end, and if you're not prepared, it could cost you.
"The Fed is sending signals they'll likely raise their rate," said Shane Stewart, a certified financial planner.
Exactly when the Federal Reserve will raise its federal funds rate remains up in the air, but when it happens, expect big ripples.
"The stock market goes down and has jitters. It will affect credit," he said.
Costs for anything we buy on credit will go up, Stewart said. With the average household hold nearly $7,000 in credit card debt, the increased costs for plastic will be one of the most expensive.
"If you're already pinched a little on paying your credit cards, those rates going up will make things worse," Stewart said. "The best thing that can be done for an individual is to minimize the use of credit and the amount you owe."
If you've been looking into buying a new home or car, now may be the time while interest rates are at their lowest.
The best thing that can be done for an individual is to minimize the use of credit and the amount you owe.
–Shane Stewart, financial planner
"It doesn't mean you have to rush to the market because the rates will go up slightly and measuredly — won't go up all at once," Stewart said.
He said your financial house needs to be in order. A good place to start is by fixing your credit score. With slight rate increases, your credit worthiness may still be a big factor
"The Fed will have their rate increase. In turn, those offering credit will have their increase. They still make that decision based upon what your credit score is," Stewart said.
And for the first time in years, your savings will start earning a little more interest.
"Rates are very low, which is great for your debt but bad for your savings. And as the rates increase, it will be great for your savings. It will help that a little bit," Stewart said.