Where are interest rates going?

2moretrees · #1 (**permalink**) 03-25-2005, 12:01 PM

Do you think that interest rates will continue to rise through the year? If so, how is this going to effect you?

I have one credit card that is a variable interest card. I'm thinking of cancelling it or maybe switch it over to a 0% interest card.

Momof3grls · #2 (**permalink**) 03-25-2005, 01:30 PM

AS FOR cc's I would definetly switch to 0% thats all I do now I get so many offers for those if I have a balance I do that.

As for cds I think the interest rates will continue to rise threw this year as well as interest rates on mortgages

PRICEPLUS · #3 (**permalink**) 03-26-2005, 04:21 AM

Definitely going up! I did however get my CC rate lowered to 6.9% by calling and asking.

byusteeler · #4 (**permalink**) 03-26-2005, 12:20 PM

The fed seems to think that raising interest rates will help curb inflation and in the far past this has worked however times they are a changing. We have had several 1/4 percent hikes and they have yet to do anything to stop the raising prices and I don't think will because the cost of oil is a big part of the current inflation of many things utilities, any product shipped by truck, and of coarse gasoline. The danger is that if borrowing gets too expensive our already weak job market will crate less jobs because it will be more expensive for business to borrow capital to expand. I am no expert on this stuff but this is what makes sense to me. If someone has more insight and a better education in economics. I would love to hear a better explanation and maybe a more correct one. My opinion was simply a totally uneducated observation.

byusteeler · #5 (**permalink**) 03-26-2005, 12:27 PM

Oh, I forgot to mention that I have nothing at a variable rate, However credit cards can still raise your rate on a fixed interest rate. They must give a certain amount of notice and you have the right to cancel the card if you don't agree with the rate change but they can still up the rate. I may need to relocate soon and this will require a new mortgage. I will have to spend a considerable about more for a home elsewhere than I can sell my home for. We are also at a 4.875% interest rate on our current mortgage so it is very troubling to see the rates rise. Savings rates are rising though which may be a good thing but not if they don't keep up with inflation. Not to be the glass half empty type but I don't see much bright in the economy for the middle class.

mjrube94 · #6 (**permalink**) 03-26-2005, 01:55 PM

After filling out my taxes and getting hit by the Alternative Minimum Tax, I agree with byusteeler on the middle class thing. As for interest rates, we have a 4.25% (fixed) car loan and a prime-.5% home equity line. I'm not sure which to put my extra savings toward, because the heloc is deductible, but the more interest rates rise, the closer the real value gets (and surpasses) the car loan. I'll need to keep my eye on that...

Armywife · #7 (**permalink**) 03-27-2005, 06:41 AM

I agree with byu- this current bout of inflation has everything to do with oil prices. Considering oil is not unlimited- asia's economical upgrades have impacted prices.. and who knows how much their economy will grow. Now I remember reading somewhere that we have significant oil in a reserve... hopefully the government will loosen its grip on the reserves by supplying it to US!

sbsake · #8 (**permalink**) 03-27-2005, 03:27 PM

The Fed will continue to raise Interest rate which means good news for people who like to save .. but bad news for loan rates .... The fed is concerned about some issues that have come up so you might see another
freeze next quarter.

Switching Credit cards is good if there is a solid reason why... switching to a low rate or 0% sounds good but you need to look at the long term what is the rate going to be and what offerings do you get with the card. Its seems that Chase and Some Credit Unions have the best rates ...