NEW YORK (CNN/Money) - It had to happen sometime.

It's been four years since the Federal Reserve raised interest rates, but the central bank finally raised the federal funds rate, or the rate it charges banks, by a quarter of a point on Wednesday.

More hikes are likely in the near-future and that will make it more expensive for consumers to borrow money.

For consumers drunk on low-cost credit, it's time to sober up.

A quarter point rate hike is expected to initially raise credit card interest rates by only 19 basis points, but subsequent increases could bring rates nearly a full percentage point higher within nine months, says Robert McKinley, CEO of CardWeb.com.

In the short run, the costs aren't that dramatic -- for an individual with $10,000 in credit card debt, a quarter point rate hike would result in an additional $25 a year in interest. Keep spending, though, and that $25 could easily run up to $100.

Penalty APRs, or interest rates for delinquent accounts, will jump. If the Fed pushes rates 3 percentage points higher over the next year, then penalty APRs could go to above 30 percent, according to CardWeb.com.

Bottom line: Consumers who rode the low-rate wave to home ownership while living on credit may find they can't afford to pay their rising monthly bills.

If you're in this situation, call your credit card issuer to ask for a lower rate. Also, read any credit card offers you get in the mail and ask your issuer to meet, or beat, the best rates. You may be surprised by the results.

Thirty-year mortgage rates have been inching higher over the past few weeks in anticipation of the hike. Rates on a 30-year fixed mortgage averaged 6.25 percent the week ending June 24, compared to their 5.21-percent low on June 12, 2003.

Rates for 15-year home loans have followed the same path, standing at 5.64 percent in the most recent week from a low of 4.6 percent last June.

If you're worrying that you will be priced out of that center hall colonial you're dreaming of, you may be better off moving sooner rather than later. Holden Lewis, a senior reporter at BankRate.com, predicts rates will likely remain below 7 percent through the end of the year.

Adjustable mortgage rates are still relatively low, but they're also on the rise. The latest data from Freddie Mac shows one-year adjustable rate mortgages (ARMs) averaged 4.13 percent last week, versus 3.45 percent a year-earlier.

Now that the Fed has raised interest rates by a quarter of a point, CNNfn's Gerri Willis tells you what the rate hike means for consumers. Play video (Real or Windows Media)

If you already have an ARM, HSH Associates' vice president Keith Gumbinger says it's time to sit down and reacquaint yourself with the terms of your loan. Make sure to check for maximum allowable rate caps when your rate adjusts. Hybrid ARMs in which the first rate adjustment can occur five or seven years into the term of the loan can have rate caps of as much as 5 percent.

"Welcome to the cold reality," says Gumbinger. "A lot of people selected short-term interest rate product and are now beginning to see how these things benefit the lender."

Home equity loans (HEL) are lump sums borrowed at a fixed rate and paid off over a set number of years. If you already have one, a rate hike won't affect you. If you're shopping for one, you can expect to pay more.

Lenders have already begun pricing in the rate hike. Rates for a $30,000 HEL stood at 6.75 percent in April. Sign up for one today and you'll pay a 7.05 percent rate.

The same trend applies to home equity lines of credit (HELOCs). Most HELOCs are open-ended loans backed by the portion of the home's value the borrower owns and have adjustable rates tied to the prime rate.

If you have a HELOC already, Gumbinger says you'll see your rate reflect that change in about one to three billing cycles. HELOCs generally have no annual limits or per adjustment limits (other than a lifetime maximum of 18 percent).

Gumbinger suggests you choose between a HELOC or home equity loan based on how you plan to use the money. If you have a one time credit need, you're better off with a home equity loan. Consumers who have ongoing credit needs, such as ongoing medical bills or tuition bills will be better off with the line of credit.

Although consumer rates are floating higher, federally-guaranteed student loans are still falling. Beginning July 1, federal student loan rates for the 2004-2005 academic year will fall to their lowest level in their 39-year history.

Interest rates on Stafford loans, which are the bread and butter of student loans, will drop to 3.37 percent from 3.42 percent in 2003-2004.

That's good news for people in school now, but better news for graduates looking to consolidate their loans. Recent grads who consolidate their loans in the first six months after grabbing their diploma may qualify for a 2.875 percent interest rate.

If you're just getting out of school, you may be need a car to drive to that new job. Unfortunately, auto loan rates are already on the rise. Rates for a 36-month new care loan rose to 5.62 percent from 5.59 percent just last week, according to BankRate.com.

Longer-term auto loans rates are also rising. Last week, the rate on a 60-month loan stood at 5.81 percent; that rate has now ticked up to 5.84 percent.

However, BankRate.com reporter Lucy Lazarony says dealer financing is still attractive. You'll need to do some homework before heading to the dealership.

Review your credit report beforehand so that you know what you're loans you are eligible for. That way, you're less likely to be talked into a loan with a less attractive rate. Lazarony also says having a loan in hand from a bank or credit union is always a good strategy. That way, the dealership has to beat your best deal.

You can compare auto loan rates across the nation at www.bankrate.com.

Higher rates mean better returns for CDs (certificates of deposit), money market accounts and savings accounts.

A CD is a debt instrument typically issued by a bank with a fixed maturity date. CD's often pay higher interest than a savings account, but there's a penalty for withdrawals made before the maturity date. The average rate on a one-year CD rose to 1.48 percent from 1.43 percent last week.

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Money market accounts allow investors to access the money they've deposited as it earns interest. The average yield for a money market account remained virtually flat this past week, standing at less than 1 percent.

Conventional savings accounts also carry low rates. David Wyss, chief economist with Standard & Poor's, says it will be at least two years before savings accounts start yielding 4 percent.

If you're shopping for a place to park your money and earn a slightly higher return without adding considerable risk, Morningstar editor Christine Benz suggests ultrashort bond funds, which tend to hold up well as interest rates rise.

Among her top picks: Fidelity UltraShort Bond (FUSFX: Research, Estimates), Payden Limited Maturity (PYLMX: Research, Estimates), and SSgA Yield Plus (SSYPX: Research, Estimates).

Investors willing to take on slightly more risk may want to take a look at a short-term government bond fund like Vanguard Short-Term Federal (VSGBX: Research, Estimates) or a short-term bond fund like Fidelity Short-Term Bond (FSHBX: Research, Estimates).

For more information on any of these funds visit www.morningstar.com. Shop the best rates for money market accounts and CDs at www.bankrate.com.  

Gerri Willis is a personal finance editor for CNN Business News. Willis also is co-host of CNNfn's The FlipSide, weekdays from 11 a.m. to 12:30 p.m. (ET). E-mail comments to 5tips@cnnfn.com.