Interest Rates are Rising…What Does that Mean for Me?

Nearly everyone is impacted by Federal Reserve decisions because of this one fact: it impacts consumers’ cost to borrow money. So, if there ever was a time to ask for help in managing debt, this would be that time, as your interest due on any debt balances may start to rise over time.

Maintaining a healthy credit score and having access to credit are good things…especially if you don’t overuse them. But we all know that life can get in the way, especially for young people trying to get ahead. When it comes time to furthering your education or purchasing a home, be sure you are ready. The unforeseen but related expenses can add up fast and cause many individuals to take on credit card debt, which can later impede your ability to achieve other life goals.

Here are 3 tips that can help you or your children to carefully and responsibly establish credit and manage debt:

1. Start establishing an excellent credit history as soon as possible. This will determine your future costs to borrow, as lenders rely heavily on credit histories when determining whether you are a “risk” to them (which then determines the price of your loan/credit). If you are just starting out, get a first credit card with a small spending limit ($500), using a co-signer if necessary (parent, spouse, etc.), or preferably on your own if employed.

2. Begin making small purchases with a credit card, paying off the balance in full, on time, and every month. This not only begins building good financial habits (and restraint), but it establishes a good credit history with bank lenders, which will be important later when shopping to acquire credit for a first home or automobile.

3. Get educated by consulting with a financial expert. Have you found yourself impacted by unforeseen expenses due to student loan debt, a job loss, home repairs, divorce, or an accident or illness? It can be confusing when determining how to prioritize paying off loans, but there IS a smart way to fulfill your obligations while also protecting yourself and potentially gaining some tax advantages along the way. Consider talking to a Financial Advisor, who is an expert at keeping you on a solid path while also helping you save and invest along the way.

The Financial Advisors at Jemma understand that your life goals sometimes experience a detour. We are here to help you with these and other money and investing questions whenever you are ready. Contact us today for a complimentary consultation.