Here’s how the Fed rate hike will affect your finances

Personal finance

For starters, credit card rates are already at a record high of 17 percent on average, according to Bankrate.

Most credit cards have a variable rate, which means there’s a direct connection to the Fed’s benchmark rate, and as interest rates rise, card holders will continue to get squeezed.

The typical American has a credit card balance of $6,375, up nearly 3 percent from last year, according to Experian’s annual study on the state of credit and debt in America. Total credit card debt has reached its highest point ever, surpassing $1 trillion in 2017, according to a separate report by the Federal Reserve.

Tacking on a 25-basis-point increase will cost credit card users roughly $1.6 billion in extra finance charges in 2018, according to a WalletHub analysis. Factoring in the six previous rate hikes, credit card users will pay about $9.8 billion more in 2018 than they would have otherwise, WalletHub said.

What you can do about it: Shop around for a better rate or snag a zero-interest balance transfer offer to insulate yourself from further rate hikes. Then, begin to aggressively pay down your balance.

“Make hay while the sun shines,” McBride said.

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