Get Rising Interest Rates to Work in Your Favor
Be ready for rising interest rates. These rate hikes can be financially devastating for many people. Interest rates may have to go up faster than expected if inflation worsens.
Here are a few strategies for positioning your money to take advantage of higher rates while protecting yourself from negative consequences.
Credit Cards Can Take Your Money Fast
If you have credit card balances subject to high variable interest rates, consider transferring them to a zero-rate balance transfer card that offers a zero-interest rate for 12 to 21 months.
That transfer protects you against rate hikes for the next year and a half, and it provides you a clear runway to finally pay off your debt. Having less debt and more savings can help you weather rising interest rates.
If you don’t want to transfer your debt to a zero-interest card, another alternative is to seek a low-interest, fixed-rate personal loan. The best suggestion is to pay down your debts as rapidly as possible in any event.
Get More Interest From Online Banks
Online banks want to keep current accounts and attract new business. These banks provide significantly better rates and actively raise them as benchmark rates rise. So it’s worthwhile to shop around.
A good example is Marcus: by Goldman Sachs. Their high-yield online savings account pays four times the national average. There are no fees and no minimum deposit.
A Solution For Mortgage Rates
Over the last year, mortgage rates have risen and
are very likely to continue. If you’re thinking about buying a house or refinancing an existing one, lock in the best-fixed rate.
If you currently have a variable rate home equity line of credit and used a portion of it for a home repair project, ask your lender if they would be willing to fix the rate on your outstanding balance. Turning it into a fixed-rate home equity loan would be beneficial.
Buy Shares of Bank Stocks
As interest rates rise, there are many benefits for banks and other lenders. The interest income they earn usually grows faster than what they pay for funding. Certain bank stocks tend to perform well in an interest-rising environment.
A couple of the best bank stocks to buy in 2022 include JPMorgan Chase & Co. The ticker symbol is JPM. Another top choice is Bank of America, with the ticker symbol BAC.
Make Big Money
You can go short the stock market with Exchange Traded Funds. When you go short something, you want it to go down. Rising interest rates are harmful to the stock market.
We appear to be entering a cycle of rising interest rates. This cycle is terrible news for the stock market. I will be taking advantage of this situation by shorting the market.
If the stock market continues down, you can make a lot of money buying shares of the UltraPro Short Dow 30. The ticker symbol is SDOW. Exchange-traded funds trade precisely the same as regular stocks.
Remember always to implement sound money management when buying exchange-traded funds or stocks.
Rising interest rates can be financially devastating. There are ways to combat these rate hikes and possibly make a lot of money. This writing contains five excellent ways to take advantage of rising interest rates.