Houston experts say not to panic over interest rate hikes, but instead offer free financial assistance for buying cars, homes and credit cards

[ad_1]

HOUSTON, TX (KTRK) — As interest rates rise, Houston offers help with rising costs that could still help you avoid financial freefall.

CREDIT CARDS, CARS AND HOUSES COST CONSUMERS SIGNIFICANTLY MORE THAN A FEW MONTHS AGO

The cost of goods is at its highest in 40 years. To calm spending, the Federal Reserve raised rates again this week. This is the fifth time this year.

This has made using a credit card or buying a house or car more expensive than just a few months ago. Here are some examples.

RELATED: Federal Reserve Steps Up Inflation Fight With Another Sharp Interest Rate Hike

The APR for credit cards has increased from 16% to 19%. If you make a monthly payment of $100 on credit card debt of $5,000, it will cost you $1,691 more in interest and it will take you another 17 months to pay it off.

If you buy a $35,000 new car now, compared to earlier this year, you’ll pay $31 more per month for the loan. It is much higher for houses.

Mortgage rates have risen from around 3% to 6%. The Houston Association of Realtors said the average home price in the city is around $411,000.

Monthly mortgage payments on the average Houston home have gone from $1,723 per month to $2,308.

SEE ALSO: Less than half of Houston-area residents can afford a home at the median price

Bankrate.com chief financial analyst Greg McBride said he didn’t know how long the higher rates would last, or how far the Federal Reserve would push them.

“These are open questions because inflation is really at the center of this wheel,” McBride explained. “Until we see a significant and sustained moderation in price pressures, this is really going to force the hand of the Fed to continue to be aggressive in raising interest rates.”

‘DON’T PANIC’: HOUSTON HAS FREE HELP TO HANDLE THE FINANCIAL PAIN CAUSED BY RATE HIKES

United Way helps people achieve financial stability for free. Once registered, you work with a financial coach. All you have to do is call 211 to get started.

“We have coaches who can help you monitor your credit score,” said Aaron Sturgeon, senior manager of United Way Financial Stability. “Take a look at your saving habits, your spending habits, and really put a strategy in place that helps you reduce that debt.”

If you’re worried about buying a car, a house, or using your credit card, Sturgeon said don’t panic. “One thing you need to be aware of is that as interest rates go up, you want to make sure you’re selecting the right product if you’re considering buying an automobile or a home,” Sturgeon explained.

There are other ways to beat rate hikes. McBride said to consider balance transfer programs that offer zero or low interest ways to pay off debt. “It’s extremely helpful in this environment because not only does it protect you from further rate hikes, but it gives you that runway where you can pay off that debt once and for all,” McBride said.

McBride said there are three other steps you can take as well. “Pay off high-cost debt, especially credit card debt,” McBride explained. “Second, increase your emergency savings. Nothing will help you cope better with all that is going on economically than having some money set aside. And third, keep making those contributions to the plan. retirement.”

For updates on this story, follow Nick Natario on Facebook, Twitter and instagram.

Copyright © 2022 KTRK-TV. All rights reserved.


[ad_2]
Source link