What a Fed rate hike means for average consumers

The Federal Reserve Wednesday raised its benchmark short-term interest rate by a quarter-point and signalled potentially up to seven rate hikes this year.

Raising the Fed rate means increasing the rates that banks charge one another for overnight loans. This, in turn will help curb inflation by making borrowing costs for consumers go up.

Consumers will feel the sting of the increase in prices and interest rates soon.

In terms of credit card rates, consumers will eventually pay more on any revolving debt. Within one or two statement cycles, consumers will see a higher rate passed on to them.

As for interest on car loans - they are expected to rise, too. However, the interest rate a borrower will pay, relies on multiple other factors, primarily, such as, their credit history, the type of vehicle, the loan term and down payment.

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