The Marriner S. Eccles Federal Reserve Building in Washington.
Kelly LaVigne is vice president for consumer insights at Allianz Life. She said that rising interest rates can feel like a two-edged blade. The first rate to rise is the short-term loan. Brett House, professor of economics at Columbia Business School, said that the cost of variable-rate debt had already risen substantially. If you have a variable interest rate, it's directly linked to the Fed benchmark. According to WalletHub's analysis, if the Fed does announce a 25 basis-point hike as expected next week, credit card holders will pay an additional $1.72 Billion in interest just this year. They are also tied to the prime rate. The rate increase won't affect homeowners immediately because 15-year and 30 year mortgage rates are tied to Treasury yields, the economy and Treasury yields. Moment - Getty Images
The Fed's action could increase the average rate of interest on a new auto loan in the coming months. The Fed's actions are not immediately felt by most borrowers because the rates are fixed. The Fed will raise rates and therefore, these borrowers' interest rates. The Fed does not directly influence deposit rates. However, yields are correlated with changes in the federal funds target rate. Greg McBride is Bankrate's Chief Financial Analyst. He says that if this was the last Fed increase in a long time, "you might see yields begin to fall." Now's the time to lock in your investment.