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Our name says it all: MoneyLend, and that’s what we do. But that’s not all we do, because MoneyLend is based on a commitment to changing people’s lives – and part of that change rests on financial literacy and education, with shared information our customers can use.
That’s why we’ve started this new Consumer Insight series. We wanted to design smart, accessible MoneyLend stories and articles that help us share our expertise with the wider community. It’s here that you’ll find news explainers, how-to advice and more to help you.
So we’re starting with a focus on the potential for a Federal Reserve interest rate hike. The Fed, which has held the federal funds interest rate at 0 to 0.25 percent for years, said in late July that as the economy continues to recover, a long-anticipated rate hike becomes likely.
That’s a development that the Federal Open Market Committee will consider with some additional improvements in the labor market, and an inflation rate in the two percent range. But what does that mean for consumers who need to borrow or want to save more?
“If interest rates rise next year, there are some real implications,” said Dan Blacharski, spokesman for MoneyLend.net. “The increases almost always make borrowing money more expensive, of course, but these are gradual changes. The thinking from most experts is that rates will stay below historic averages for quite some time. Still, it may be time to apply now for that credit card with a low teaser rate, before those promotions disappear.”
That’s a likely development as financial markets continue to make adjustments, and no longer have to work to woo the most credit-worthy consumers. Other scenarios include rate hikes on ARMs and other variable-rate products, which makes this an attractive time to pay down those loans – or switch to other options. If you’re planning on a mortgage, now may be a good time to take advantage of still-low rates. And those with less-than-perfect credit histories may find more lending options available with an uptick in interest rates.
But thrifty savers have been hurt by lower interest rates, and clearly welcome the news that the nation’s economic recovery is at last leading to the decision to raise interest rates. MoneyLend has connected with many customers whose “safe” investment products have underperformed since the housing market collapse of 2007 and subsequent recession, and retirees in particular stand to benefit from earning more interest on their savings deposits. So the decision to raise interest rates in the near future is likely to have a range of impacts.
The Consumer Insights series from MoneyLend is designed to provide financial expertise to consumers who want to improve their financial literacy and better understand consumer credit use, available loan options and more. “When we see lenders ready to lend again, and consumers looking for loans in full force,” Blacharski adds, “we want to make sure they have an informed perspective as well as the opportunities they need.”
Be sure to visit MoneyLend.net for our next Consumer Insights post, and follow MoneyLend on Facebook for up-to-the-minute info on the ways that money matters to you.