Interest Rates: What's in Store for You

The much-awaited increases in interest rates are finally here. These changes have implications for both individuals and business owners. Find out what the future holds for you.

Prepare for Subtle Increases
Remember that the increases were widely expected. Interest rates have been at their lowest levels for more than 40 years, so an increase was inevitable. The Federal Reserve has also made it clear that they only plan to increase rates in a gradual and phased manner. You'll experience subtle differences, and now is your opportunity to prepare for the coming months.

Home Prices and Mortgages
Higher interest rates mean that demand for homes will begin to cool off resulting in lower prices. This is good news if you've found home prices unaffordable so far. If you already have an adjustable-rate mortgage, you'll see a slight rise in interest payments. Use this interactive calculator to analyze your spending and identify areas to save.

Changes in Your Wallet
You guessed right: you'll begin to see an increase in your credit card APRs. Make sure that you're informed about any rate changes from your credit card company. This is your chance to reduce some of your debt while your monthly payments are still low.

Investing for the Future
It's a good time for savers. With deposit rates finally going up, consider investments in CDs and money market funds. What about stocks and bonds? In reality, the financial markets are ahead of the curve and have already been adjusting themselves in anticipation. You're not going to see any short-term dramatic swings, but there are certainly going to be long-term effects, especially with bond prices. It's a signal for you to review your portfolio allocation and consult your Financial Advisor.

The Bigger Picture for Businesses
Small business owners have a different set of challenges. Though your loan payments will start to rise, there's good news ahead. Higher interest rates are a reflection of a better economy. You've enjoyed record-low rates for a long time, now it's time to grow your business with the prospect of a strong and healthy economy.

Get It Straight from the Experts
Why wait to read about it in the papers? Get an expert peek into the future at our Economic Commentary section. Access in-depth market analysis, including monthly forecasts, from Wachovia's economists.

This newsletter does not constitute legal, accounting, tax or other professional advice. We recommend you contact your own legal, accounting, tax or professional advisor as neither Wachovia nor the publisher assumes responsibility for your relying on the information provided.