‘Inflation has been more of a problem’: How recent rate hikes impact people’s wallets

The Federal Reserve announced it was increasing interest rates another .5% to curb inflation.
The Federal Reserve announced it was increasing interest rates another .5% to curb inflation.
Published: Dec. 15, 2022 at 5:22 PM EST|Updated: Dec. 15, 2022 at 5:25 PM EST
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KNOXVILLE, Tenn. (WVLT) - As inflation takes its toll on the American economy, the United States Federal Reserve hiked interest rates again to attempt to get it under control.

As Americans head to stores to shop for Christmas, the realization of if that spending will hang around longer is something many are coming to terms with.

“Santa is still going to deliver presents and we’re still going to buy things and many times we buy things on credit cards the danger could be we get into January and see our interest on our credit cards has moved up perhaps,” said Justin Goodbread the president of WealthSource. “And now if we’re not fully prepared to pay off our bills then our interest carried could end up dampening our monthly expenditures.”

Rates on things like credit cards, mortgages and car payments are all set to increase.

”Investing impacts everything from the glass of water on your table to the car in your driveway to your portfolio to your house,” said Goodbread.

The impact of the hikes could be felt in even unseen places.

”Another thing to think about is the cost of borrowing in other ways could be more expensive if you were thinking of taking out a personal loan, a loan to make improvement on your home for example,” said Sara Rathner a financial expert at NerdWallet. “That’s also going to potentially cost more so you’re going to want to comparison shop and see what options you have based on your financial situation.”

Rathner adds seeking out a number of different loans for a better shot at a lower rate may work best for some people.

While big purchases will cost more right now, the purchases we make every day may actually be helped by the rate hikes.

”The vast majority of everyday people shouldn’t be worried about this its such a micro blip of everyday movement yes we’re going to see some impacts in various things we’ve mentioned but inflation has been more of a hindrance or problem for us as every day people than the interest rate movement has been,” said Goodbread.

Interest rate hikes are being done in order to calm inflation.

”If we focus on the spirit of the season and the season and the opportunity that a new year brings for us things like a point-five percent interest rate hike really is going to effect most of what we deal with,” said Goodbread.