While the Federal Reserve held interest rates at their May FOMC meeting earlier this week, a Morning Consult survey from January found that 62% of consumers believe rates are too high.
LendingTree Chief Consumer Finance Analyst Matt Schulz explains how consumers can take advantage of higher interest rates, namely by investing in high-yield savings accounts, capitalizing on mortgage rate variety, and improving their credit score.
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The Federal Reserve held rates steady at its May meeting as it aims to keep inflation under control. Earlier this year, 62% of consumers surveyed by Morning Consult said they feel rates are too high. I'm going to bring in Matt Schulz, who is the LendingTree Chief Consumer Finance Analyst to talk through how consumers can use high rates to their benefit as part of our saving series brought to you by Synchrony. Matt, good to have you. How can savers take advantage of higher rates?
Well, the the good news is that that high rates, while they're really tough on people who are carrying debt are really good for savers because it means that we're still going to see rates on online high-yield savings accounts remain really high. They're not as high as they were last year at this time since the the Fed has cut rates. But if you shop around, you can still find these accounts that are giving 4% or sometimes significantly more back, and and that can really ramp up your savings and really help people build important things like their emergency fund.
So how should potential home buyers navigate higher rates?
Well, the most important thing for people to know with home buying is is that shopping around and comparing rates can make a huge difference. It can literally save you tens of thousands of dollars. And sites like ours at LendingTree and others where you can compare multiple rates from multiple lenders can allow you to save an awful lot of money.
So, what's your advice for consumers with high interest rate debt?
Well, my advice is to control what you can control and to get those interest rates down as much as you can. So, a 0% balance transfer credit card, for example, is about the best weapon that somebody can have in their arsenal against credit card debt because it can give you a year, sometimes up to 21, 24 months without accruing any interest on that debt, and that can be a real lifesaver for people who are struggling.
So, how can improving your credit score help you to save?
Improving your credit score is a really big deal. There's there's very little in life that is more expensive than having crummy credit because it can end up leading to you spending thousands and thousands of dollars over the course of your life in the terms of higher interest rates, uh more fees, and just overall worse terms on loans that you get. So the more that you can do uh to improve your credit, the better off you'll be.
