What Does Downgrade Mean for You? - WTVM.com-Columbus, GA News Weather & Sports

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What Does Downgrade Mean for You?

By Zaneta Lowe  - bio | email 

COLUMBUS, GA (WTVM) - The ups and downs of the stock market are just one of many in a ripple effect of the downgrading of the U.S. credit rating.  So what does this all mean for the average consumer?  First, pricier borrowing.

"Mortgage rates are probably your most susceptible to higher interest rates as a result of the downgrade. In terms of pocketbook impact, most consumers are not going to see an impact from the downgrade when they look at things like credit cards, auto loans or student loans," says Greg McBride of Bankrate.com.

At least right now, according to McBride, who says the immediate impact of the downgrade is minimal.  However, it's always good to prepare.

"Your best defense is a good offense and a way to defend yourself against higher interest rates now or down the road is to pay down your debt aggressively, particularly higher interest rate debt like credit cards and also look at re-financing into fixed rate debt."

Like going from an adjustable rate mortgage to a fixed.

According to McBride though, the downgrade shouldn't be your biggest worry, but rather the current path of the overall, U.S. economy.

"If we go into a recession, there's going to be a couple more million people put out of work, our retirement accounts are going to take another hit."

 

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