What to Expect as Market Rates Increase!

By: Barbara Mathey

We hear daily about everything that is changing and going on in the economy. Increasing prices in addition to the potential increases in loan interest rates are two of the greatest areas of concern. While there is little we can do about these issues, there are certain behaviors we can think about as we maneuver through the coming months.

RISING INTEREST RATES

• Not all rates will rise immediately. When you hear that the Fed has raised a rate, that is on the business level and will not automatically mean that the rates we pay will all increase immediately. Financial institutions and other businesses will make that determination.
• There is still a lot of competition for loans so certain institutions, such as your Credit Union will not be quick to raise rates.
• Real estate loans have already seen increases, although there are still good rates available, so shop around.
• Don’t wait for rates to “go back down” as that is not likely to happen. Find a rate you are comfortable with and proceed.
• Don’t engage in “urgency” buying. Buying unnecessary items not needed now just to avoid a higher loan rate.
• Pay attention to the actions of the Federal Reserve. We have already seen one rate increase in 2022.
• The Credit Union may have rate increases in the future; however, we remain committed to keeping our rates some of the lowest in the market!
• On the savings side, pay attention to rates offered and if there is a high-rate opportunity it should be considered. This may not come up for a while since most financial institutions are overloaded with savings dollars.

DEALING WITH RISING PRICES

• Take time to plan menus and items needed and include a “back-up” plan if original items are not available.
• Consider delivery - is cost actually less than the mileage cost for you to drive to the store? Also, you will not be tempted to buy items not needed. Many stores have free delivery options.
• Keep your auto maintenance current.
• If you are in the market for a new or used vehicle, get pre-approved for a loan at the Credit Union, you will know what you can spend, and you won’t make a seller wait and have a better time negotiating.
• When buying a vehicle and paying a premium price, consider the purchase of a GAP policy. GAP insurance is coverage that would help pay the loan if a vehicle is totaled or stolen and you owe more than the car’s depreciated value.

The previous list is a few highlights to consider as 2022 continues. Your Credit Union will be on top of all changes, and we will keep our member’s best interest in the forefront of any decision and action we take. We encourage you to call to check on Credit Union loan rates and opportunities.