Federal Reserve rate hike and how it would impact US Household
Those with adjustable-rate mortgages, home equity lines of credit, auto loans and other loans with variable rates of interest will be hit hardest.
The effects of the expected Federal Reserve interest rate hike on Wednesday will extend beyond corporate America to household budgets.
Most people will see at least a minor impact on their credit card statements in the next few billing cycles, while those with adjustable-rate mortgages, home equity lines of credit, auto loans and other loans with variable rates of interest will be hit hardest.
Credit cards with fixed interest rates and annual percentage rates that don't change for a set period of time won't be immediately affected.
Fixed-rate mortgages are also going to become more expensive, which could have a chilling effect on the real estate market. Higher interest rates typically depress home values by making monthly mortgage payments more expensive.
The Fed is expected to lift its benchmark overnight lending rate by a quarter of a percentage point to a range of 1.50 percent to 1.75 percent at the end of a two-day meeting on Wednesday. The U.S. central bank will also update its assessment of the economy.
"The cumulative effect (of rate hikes) can be quite significant," said Greg McBride, the chief financial analyst for Bankrate.com.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)