The Federal Reserve Bank is raising interest rates by a quarter of a point. The increase comes after a meeting of the federal open market committee.
It is the second rate increase in three months, which Janet Yellen, Chair of the Federal Reserve, says is due to the improving economy. The federal funds rate is the interest rate banks and other lenders charge each other and influences what banks charge consumers.
Some of your interest rates may gradually increase, but not all.
"If you have variable rate debt, that's where you're most susceptible to these rising interest rates you could see your monthly payment go up a hundred bucks a month, maybe more, and it's not one and done. You're very likely to see a similar increase the following year. That's the biggest exposure most households have. Credit cards and home equity lines of credits are also seeing steady increases and it just makes it tougher to pay down that debt," Greg McBride, Chief Financial Analyst, Bankrate.com
The decision marks only the third time since the financial crisis that the fed has implemented a rate increase.
Interest rates are expected to go up at least one more time this year.