People with outstanding credit card payments could struggle to pay their bills after the Federal Reserve raised a key interest rate by a quarter.
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Channel 2’s Tom Jones talked to one shopper who says the best way to stay out of credit card debt is to not get into it.
“The best thing you can possibly do is do not get in debt over your head,” Brian Obrien said.
That’s why he said he’s not concerned about the Federal Reserve’s quarter-point rate hike, an increase that’s expected to increase the cost of borrowing money.
“This makes borrowing money more expensive,” financial advisor Abby Reed said.
Reed says you can expect to see increased payments in so many areas" “On an average 30-year mortgage, on a car loan, credit cards.”
Obrien said it’s why he doesn’t keep credit card debt.
“You got to stay in a budget,” he said.
Obrien says his home is paid for and he still drives a 2004 Lincoln Navigator.
“I don’t pay anything extra. Everything’s paid for,” he says.
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He admits not everyone is in a position to do what he does.
Real estate agent Maja Sly says she has already heard from potential homebuyers wondering how the rate hike will affect their mortgage.
She tells them sellers want to sell, and it’s important to negotiate to offset any rate hike.
“We can’t control rates going up, but we can absolutely control how we negotiate with the seller,” said Sly.
Preston Dumont helps seniors with affordability issues. He says many are already struggling. Dumont is concerned about the rate hike.
“You can’t bleed a turnip,” he said. “You can’t get any blood out of a stone, so.”
Financial advisors urge people with credit card debt to come up with a plan to pay it off and save for purchases instead of relying on interest-bearing credit cards.
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