Consumer interest rates creep up

By Jen Haley, producer

NEW YORK (CNN) -- The Federal Reserve is unlikely to raise interest rates today. But as the prospects for the U.S. economy brighten, a new concern faces consumers: rising interest rates.

Mortgage rates have been slowly creeping higher. Right now rates average just over 5%. And rising interest rates could hamper the housing market's recovery.

If you have an adjustable mortgage and you anticipate staying in your house for at least three more years, consider refinancing now. It makes sense to trade away the uncertainty that your adjustable rate will reset sharply higher, in exchange for predictability of a fixed rate says Greg McBride of

And if you're in the market for a house, you may want to step up your efforts. If rates rise, that means you won't be able to afford as much house for your money.

Car loans, credit cards and home equity lines of credit will become more expensive to pay back. The average interest rate on a variable interest rate credit card has been rising for the past year. Right now the average rate tops 14% . Even a two-percentage point jump in rates is a big deal to your wallet. If you carry a balance of $10,000, you'll pay $200 more per year in interest payments alone, says McBride. And your minimum payments will rise too. So, if you do carry a large credit card balance, try to pay as much as you can over the minimum payment to get rid of that debt faster, and shop around for a lower rate card.

The flip side is that rising interest rates are good for savers. The higher the interest rate, the more money you'll eventually make on money market accounts or bank CDs. CD rates have been extraordinarily low. In fact, according to, a one year CD is yielding less than 1-1/2%. It could be a while before we see more income from these investments. Even so, you don't want to lock yourself into a CD that has a maturity longer than a year or two.

Bottom line: Preserve the flexibility to reinvest your money once interest rates start to move up.

Talkback: Have you been facing higher interest rate charges? To top of page

Overnight Avg Rate Latest Change Last Week
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15 yr fixed3.75%3.71%
5/1 ARM4.17%4.04%
30 yr refi4.27%4.27%
15 yr refi3.71%3.68%
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