The Federal Reserve has pledged to keep interest rates low until mid-2015. They are hoping that by doing this, they can spark some economic growth. So what do low interest rates mean to you?
Tackling your high interest debt should be first on your list. As rates decrease so should your credit card rates. If they are not automatically going down, you should call the credit card company and request it. They should
If they refuse to budge, you should start shopping around. You may find a card that is a point or two less or even one that offers zero percent for six months. While this may not seem like much, if you have a larger balance, this could mean hundreds if not thousands of dollars saved over the years.
Buying a home during this low interest rate period is also a smart decision. If you’ve been waiting for the perfect time to buy, that time is now. If you’re interested in what mortgage rates are available in your area, you can do a localized search like San Jose Home Loan.
Now you can finally get into that house and still be saving money on interest rates. Just make sure that you don’t buy a house that is more than you need just because you can. You should buy the house that you need and take advantage of this opportunity to save money.
If you already own a home that was purchased at a higher interest rate, then this is the best time for you to refinance. Even getting a point less on your mortgage can save you a couple hundred dollars a month. Just remember that if you are going to refinance, make sure that you are truly going to save money by calculating the expenses of refinancing.
Now while the low interest rates are great for tackling your high interest debt, buying a home, or refinancing a current mortgage, they do have a downside when it comes to making money. You will see that regular savings account rates have been getting lower.
You should look to see if your bank offers a high yielding money market. CD’s are also a great option. The best part of CD’s is that the rate is locked in for the specified amount of time. This is a great way to save money even if rates continue to drop.
So as you can see there are pros and cons to rates being at an all time low. Hopefully I have been able to show you what low interest rates mean to you and you can now make a more educated decision.
Disclosure: “What Do Low Interest Rates Mean” is a sponsored post, however, all the points and views are my own.