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What the Federal Interest Rate Hike Means for You

The interest rate hike affects everything from savings to mortgages. Here's how it breaks down for you.
Image: A man walks past the Federal Reserve Bank in Washington DC
A man walks past the Federal Reserve Bank in Washington in Dec. 16, 2015.Kevin Lamarque / Reuters, file

The Fed raised interest rates a quarter of a point this afternoon. Here's what it means for your money.

Savings: "The 'average' saver won’t see much benefit because the 'average' financial institution is unlikely to increase the measly payouts in a meaningful way," said Greg McBride, chief financial analyst for

Those salting away their cash in a bank account have earned next to nothing in interest for the past few years. That won't really change.

Someone with $1,000 in the bank would earn 40 cents more in compound interest over the year if rates go up, if the national average savings interest rates go up from 0.11 percent to 0.15 percent.

And the third of people in a recent survey who reported having $0 in savings will of course see no benefit.

Credit Cards: You'll pay an extra $40 in interest every year, based on the average credit card debt of $16,000 at current average of 15 percent interest. (This calculator lets you plug in your specific credit card rate and balance to see what your impact is).

Home Equity Line of Credit (HELOC): A $30,000 line of credit will cost you $75 more in annual interest.

New Car: Financing a $25,000 new set of wheels increases by $3 more a month.

Mortgages: If you're shopping for a new house, the mortgage could run you an additional $720 a year if all of the Fed's three expected rate hikes go through, based on a $200,000 home currently financed at over 4 percent, according to

However, long-term mortgage rates are not tied directly to the federal interest rate. In fact, the last time interest rates went up, mortgage rates went down.

Borrowers eager to lock in their rates before any potential increase have already surged to refinance.

"Once the banks raise the interest rates on their credit products like mortgages and auto, this will, on the margin, impact the ability of consumers to buy new houses and cars," Sumit Agarwal, professor at Georgetown’s McDonough School of Business, told NBC News.

"It will also impact the existing home owners who have adjustable rate mortgages, as their rates will go up, and their debt service burden will be higher," he said. "So, they will have to cut down consumption on discretionary items, like dining and travel."