Fed Hints at Possible Rate Increase
By Scott Sumerford on Tuesday, July 10th, 2007 :: 4:01 pmCategory: Financial News
The Federal Reserve, America’s economic regulator, hinted at the possibility of raising interest rates to counter the threat of inflation. The Fed’s rate-setter, the Federal Open Market Committee (FOMC), met June 28 to set its target for the fed funds rate and commented on rising inflation levels and consumer prices.
While the FOMC decided to keep the rate steady at 5.25 percent for now, the possibility of an increase is likely when the committee meets again Aug. 7. The fed funds rate indirectly determines the prime rate, which is set at 3 percentage points higher at 8.25. The prime rate is the benchmark for consumers and business loans.
If the Fed decides to increase rates, the effect will hurt the thousands of Americans who hold credit debt, as interest rates on credit cards fluctuate with the prime rate. The total amount of revolving credit in America reach $887.2 billion in April 2007, according to the Fed’s Consumer Credit report released June 7.
Rising interest rates could further worsen many financial situations for people who hold multiple high-interest debts. In order to free yourself from incurring high interest costs, you should consider a debt-relief service to help eliminate your debt before rates increase.
Among the popular methods to repair debt problems, debt settlement helps consumers save money while paying off credit card debts at a reduced price. A debt settlement company will work with your creditors to reduce your total credit card debt.
Debt settlement can save you thousands on your total credit card debt balance. The various other debt-relief methods, such as debt consolidation and credit counseling, require you repay the entire debt balance. You can save more money with debt settlement than any other method to pay off debt.
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