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With rising costs squeezing margins, many retailers are rethinking their return policies, shortening the return window and even charging a return or restocking fee.
Expect more limitations on what can be brought back and when, experts say.

Policy adjustments ‘deter the consumer from returning’

With rising costs squeezing margins, many retailers are rethinking their return policies, shortening the return window and even charging a return or restocking fee, according to Spencer Kieboom, founder and CEO of Pollen Returns, a return management company. 
Stores such as Gap, Old Navy, Banana Republic and J. Crew (which was once well known for a generous return policy that spanned the lifetime of a garment) have shortened their regular return windows to within a month. Holiday shoppers have some reprieve: J. Crew and others are currently offering extended holiday returns and exchanges.

At Anthropologie, REI and LL Bean (which also once promised lifetime returns), there’s now a fee — all around $6 — for mailed returns.
“These adjustments in return policies are not there to cover costs,” Kieboom said. “They’re really there to deter the consumer from returning.” 

‘The supply chain is designed to go one way’

United Parcel Service (UPS) driver pushes a dolly of packages towards a delivery van on a street in New York.
Victor J. Blue | Bloomberg | Getty Images

With the explosion of online shopping during the pandemic, “free returns was a high convenience model the customer appreciated,” said Erin Halka, senior director at Blue Yonder, a supply chain consulting company management company. Now, with higher labor and shipping expenses, it is costing retailers “a tremendous amount of money” to sustain, she said.
“Charging for returns is one way to cover a portion of that cost,” she said. “It also can deter customers from overbuying, since at least 10% of returned goods cannot be resold.”   
Just as retailers struggle with excess inventory, “often returns do not end up back on the shelf,” and that causes a problem for retailers struggling to streamline expenses and enhance sustainability, Kieboom said.

Changing the return policy is an easier pill for the customer to swallow than an increase in the purchase price.

Lauren Beitelspacher
associate professor at Babson College

“The supply chain is designed to go one way,” said Lauren Beitelspacher, associate professor and chair of the marketing department at Babson College.
“The more money retailers lose on returns the more they have to make up for that by raising prices,” Beitelspacher said.
“Changing the return policy is an easier pill for the customer to swallow than an increase in the purchase price.”

How to avoid return fees

Still, shoppers love free returns almost as much as they love free shipping. In fact, 98% of consumers said that free shipping was the most important consideration when shopping online, followed by more than three-quarters who said the same about free returns, according to a recent report by PowerReviews. Affluent shoppers were even more likely to favor a free-return policy.
If the option to return is important, get to know the policies before you buy, experts say. Often, it’s not immediately clear, Halka said. “You typically have to dig into the fine print.”

Expect limitations on what can be sent back and when, she said. “A 30-day window is now typical.”
Factor the return policy into your buying decision, since it may impact your bottom line. “You have to find the return policy that works best for you,” Kieboom said.
And to avoid returns as much as possible, consider shopping in person when you can, Beitelspacher suggested. “The majority of returns come from having regret because it’s not what we expected. Shopping in person minimizes that expectation-reality gap.”
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Fidelity Investments, the largest 401(k) administrator by assets, began offering a bitcoin fund to workers this fall. ForUsAll started offering six cryptocurrencies to workers in recent weeks.
The companies appear to be the first administrators of 401(k) and similar workplace plans to offer crypto.
The U.S. Department of Labor has cautioned employers against offering the asset class due to risks like speculation and volatility.

Justin Tallis | Afp | Getty Images

Retirement savers in some 401(k) plans are starting to get access to cryptocurrencies like bitcoin.
Fidelity Investments, the largest provider of 401(k) plans by total assets, began offering a Digital Assets Account to clients this fall, a spokesperson confirmed.

Employers sponsoring a 401(k) plan through Fidelity can choose to offer the account to workers, allowing them to allocate a share of their savings to bitcoin.
For its part, ForUsAll, a plan administrator geared toward startups and small businesses, in September also rolled out crypto to 401(k) savers, said David Ramirez, the company’s CEO.
Investors can buy into six cryptocurrencies: bitcoin, ethereum, solana, polkadot, cardano and USDC. ForUsAll intends to add five more in the coming weeks, said Ramirez, who declined to disclose which ones.
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The firms appear to be the first administrators to make crypto available as 401(k) investment options.

The moves come as the U.S. Department of Labor in March urged employers to “exercise extreme care” before giving workers exposure to cryptocurrency. The regulator cited “significant risks” for investors, such as speculation and volatility.
Meanwhile, investor interest in crypto spiked amid record growth in 2021. But prices have since plunged in what some have taken to calling a “crypto winter.”

Bitcoin, for example, has lost more than 66% of its value from its high point in November last year. (For comparison, the S&P 500 Index is down about 20% in the past year.) Bitcoin’s current price, around $21,000 a coin, is almost triple its value from the beginning of 2020, and the S&P 500 is up about 17% over that time.
Fidelity declined to disclose how many clients have opted to offer the bitcoin account to workers.
Fifty ForUsAll clients have made crypto available to employees, and an additional 100 clients are expected to join soon, Ramirez said. Those 150 plans would represent about 27% to 28% of total clients. Ramirez estimated 70% to 80% of new clients have been asking to make crypto available.
“Our core goal has always been to provide equal access to wealth creation,” Ramirez said. “We just didn’t feel it was fair Americans would be left behind in the 401(k).”

Differing approaches to an alternative asset

At a technical level, Fidelity and ForUsAll offer crypto to investors in different ways.
Fidelity’s bitcoin account is one option that sits alongside other 401(k) investments like traditional stock and bond funds. The Digital Asset Account holds bitcoin and short-term, cash-like investments, which are meant to help facilitate daily transactions.
ForUsAll’s is part of a “brokerage window,” essentially a portal through which investors can gain access to dozens of additional investments that aren’t technically part of the core 401(k) options.
ForUsAll intends to make alternative asset classes like private equity, venture capital and real estate available through the window in the future, too, Ramirez said.

Fidelity and ForUsAll have installed certain guardrails to limit investors’ overall 401(k) allocations to crypto. For example, ForUsAll limits investor allocations to 5% of their current portfolio balance and sends investor alerts if that share exceeds 5% in the future. Investors, meanwhile, can’t put more than 20% of their balance into Fidelity’s offering, though employers can choose to lower that cap.
But employers may not be so quick to make cryptocurrency or alternative asset classes available to workers due to legal risk, experts said. Workers and other parties have brought multiple lawsuits against companies over the past decade-plus over allegedly risky and costly 401(k) funds.
ForUsAll sued the Labor Department over its cryptocurrency compliance bulletin issued in March. That case is yet unresolved.

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The average price of a new car is about $45,600, down from a high of $46,173 in July, a recent estimate shows.
However, rising interest rates are still pushing up the overall cost for consumers who finance their purchase.
Here how your credit score can impact the interest rate you may qualify for when you apply for an auto loan.

Tim Boyle | Bloomberg | Getty Images

Although prices for new cars are moderating a bit, financing a vehicle purchase hasn’t been getting any cheaper.
With the Federal Reserve’s latest interest rate hike — the sixth this year — auto loans are poised to become even more expensive. The Fed’s move has a ripple effect, generally causing rates to tick up on a variety of consumer loans and credit lines (and some savings accounts).

The average price of a new car is about $45,600, according to a recent estimate from J.D. Power and LMC Automotive. That’s down from a July peak of $46,173.
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However, rising interest rates are still pushing up the overall cost for consumers who finance their purchase. The average rate on auto loans has increased from an average 3.98% in March to 5.60% in October, according to Bankrate.
And depending on a buyer’s credit score, the rate could be in the double digits.
“On a car loan, the difference between good and bad credit could equate to several hundred dollars per month,” said Ted Rossman, senior industry analyst at Bankrate.

Your credit score is one of several variables considered

The higher your credit score, the lower the interest rate you may qualify for. 
This important three-digit number typically ranges from 300 to 850 and is used in all sorts of consumer credit decisions. Lenders also typically use information such as your income and other monthly expenses.
A good score generally is above 670, a very good score is over 740 and scores above 800 are considered exceptional, according to credit-reporting firm Experian. Scores below 670 are considered fair; anything below 580, poor.

The difference in the interest rate available across different credit scores can be stark.
For illustration: With a credit score in the 720-850 range, the average interest rate for a five-year, $45,000 car loan is just under 5.8%, according to FICO’s latest data. That translates into monthly payments of $865, and the amount of interest you’d pay over the course of the loan would be $6,890.
Compare that to what someone whose credit score fell between 660 and 689 would pay. That same loan ($45,000 for five years) would come with an average rate of almost 9.4%, resulting in monthly payments of $942 and $11,514 in interest over the life of the loan. (See chart below for other credit scores.)

While it’s hard to know which credit score will be used by a lender — they have options — having a general goal of avoiding dings on your credit report helps your score, regardless of the specific one used, experts say.
“Many credit-building tips are more of a marathon than a sprint: Pay your bills on time, keep your debts low and show that you can successfully manage different types of credit over time,” Rossman said.
“That said, there are some things you can do to improve your score quickly,” he said.

Top tip: Lower your credit utilization

His top tip? Lower your credit utilization ratio. “This is the amount of credit you’re using on your credit cards divided by your credit limits,” Rossman said.
He said that even if you pay off your balances every month, the credit-reporting firms — Experian, Equifax and TransUnion — often receive balance data before you’ve paid it.
“It’s typically reported on your statement date, so consider making an extra mid-month payment and/or asking for a higher credit limit to bring your ratio down,” Rossman said.

Check for mistakes on your credit report

Additionally, he said make sure there are no errors on your credit report.
To check for mistakes and get a sense of what lenders would see if they pull your credit report, you can get a free copy from each of the three big credit reporting firms. Those reports are available for free on a weekly basis through the end of next year.

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Close to 26 million Americans have applied for student loan forgiveness.
The White House’s plan could be in jeopardy due to GOP legal challenges.

SKLA | iStock | Getty Images

Close to 26 million Americans have applied for student loan forgiveness, and the Biden administration has already approved 16 million of the requests, the White House said Thursday.
Yet its entire loan cancellation plan could be in jeopardy due to the legal challenges brought by Republicans, it warned.

“If Republican officials get their way, tens of millions of Americans’ monthly costs will rise dramatically when student loan payments resume next year,” according to a statement by the administration.
“Working and middle-class Americans who could have up to $10,000 or $20,000 of their student debt relieved under the Biden Administration’s plan will remain under the burden of loan debt — preventing them from pursuing the dream of homeownership, saving up for retirement, or starting small businesses.”

Temporary stay on forgiveness still in place

Since the White House unveiled its plan in August to cancel $10,000 for most student loan borrowers, and up to $20,000 for those who received grants for low-income families, it has faced at least six lawsuits.
Most recently, a legal challenge from six GOP-led states temporarily stopped the administration from starting to forgive borrowers’ debt. Although their lawsuit was rejected by a federal judge in Missouri earlier this month, the states — Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina — have appealed.
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U.S. District Judge Henry Autrey in St. Louis ruled earlier this month that while the states had raised “important and significant challenges to the debt relief plan,” they ultimately lacked legal standing to pursue the case.
The main obstacle for those hoping to foil the president’s action has been finding a plaintiff who can prove they’ve been harmed by the policy, experts say.
“Such injury is needed to establish what courts call ‘standing,'” said Laurence Tribe, a Harvard law professor. “No individual or business or state is demonstrably injured the way private lenders would have been if, for instance, their loans to students had been canceled.”
The GOP-led states didn’t give up after their lawsuit was thrown out. They filed an appeal, and asked the court to stay the president’s plan, which was supposed to start unfolding last month, while their request is considered. The 8th U.S. Circuit Court of Appeals granted the states’ emergency petition, leaving the Biden administration unable to start forgiving any student debt for now.

GOP-led states’ effort ‘strongest of the lawsuits’

In their challenge, the states accuse President Joe Biden of overstepping his authority. They also say that the action would cause some private lenders to lose business because it would prompt millions of borrowers who have their federal loans held with these companies to consolidate their debt into the main federal student loan program. The U.S. Department of Education had said borrowers who hold these FFEL, or Federal Family Education Loans, can take this step to qualify for its relief.
The Education Department, in order to protect its broader loan forgiveness policy, has said that FFEL borrowers needed to have consolidated their loans by the end of September to be eligible. They can no longer do so to qualify.

This will make it harder for the GOP states to make their case that the president’s plan will cost the private lenders a considerable amount of business, said higher education expert Mark Kantrowitz.
“The state attorneys general lawsuit was the strongest of the lawsuits until the U.S. Department of Education pulled out the rug by eliminating their legal standing,” Kantrowitz said.
Tribe agreed, and said the other challengers also were on shaky legal standing.
“They represent a bunch of litigants in search of a theory,” Tribe said. “But in the end, it is the merits that matter, and there is little merit in their challenge.”

For now, having student loan forgiveness in the balance could actually help the Biden administration and Democrats in the midterm elections, experts say.
“Borrowers may be anxious about whether the forgiveness will happen,” Kantrowitz said. “This may spur more of them to vote.”
If Democrats retain control of the House and pick up seats in the Senate, he said, they could pass legislation forgiving student debt.

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A sign marks a Fidelity Investments office in Boston, Massachusetts, April 28, 2022.
Brian Snyder | Reuters

Fidelity Investments is launching a commission-free crypto trading product for retail investors.
The firm, one of the largest brokerages in the world handling $9.9 trillion in assets, opened an early-access waitlist to users Thursday morning. The service, called Fidelity Crypto, will allow investors to buy and sell bitcoin and ether and use custodial and trading services provided by its subsidiary Fidelity Digital Assets. Users will be required to maintain a $1 account minimum.

“Where our customers invest matters more than ever,” Fidelity said in a statement shared with CNBC. “A meaningful portion of Fidelity customers are already interested in and own crypto. We are providing them with tools to support their choice, so they can benefit from Fidelity’s education, research, and technology.”
While trades with Fidelity Crypto will be free of commission fees, the firm says it will factor in a 1% spread into every trade execution price.
Fidelity follows Robinhood and Binance.US in offering commission-fee crypto trading. The reveal comes at a time when investors are questioning the ability of Coinbase and other exchanges like it to generate revenue. Historically they have leaned on trading fees for revenue, but fee-free trading in crypto has become an increasing inevitability.

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In today’s job market, employers are expanding their benefit offerings to attract and retain workers.
Free college may be the most effective tool yet.
Most recently, Fidelity said it will offer free college to 18,000 employees, including entry-level customer service phone representatives.

Despite growing economic uncertainty, employers are still waging a war for talent, and employees are coming out ahead.
Now, more businesses are expanding their benefit offerings with free college programs to attract and retain workers.

Most recently, Fidelity Investments said it will offer fully funded undergraduate degrees to 18,000 employees, including entry-level customer service phone representatives. The company, which already offered student debt repayment, will cover the upfront costs for tuition, books and fees at select two-and four-year schools, avoiding the need for reimbursement. 
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Other major financial institutions, including Citi and PNC, announced similar offerings this year.
Roughly 38,000 Citi front-line consumer banking employees are eligible for its education benefits program, including free college. PNC’s tuition program is available to 62,000 employees.
“The war for talent is over,” PWC U.S. Chairman Tim Ryan said at the CNBC Work Summit last month. “Talent won.”

Coming out of the pandemic, these types of benefits play a big part in the competition for workers and, as a result, more companies are offering opportunities to develop new skills, according to the Society for Human Resource Management’s recent employee benefits survey. 
Now, 48% of employers said they offer undergraduate or graduate tuition assistance as a benefit, according to that survey.

Nationwide pizza chain Papa John’s also recently announced it is offering fully funded degrees, as well as tuition assistance for associate’s and master’s degrees and professional certificate programs.
Roughly 12,000 full- and part-time front-line employees, including delivery drivers and kitchen staff who work as little as 10 hours a week, are eligible for the education benefits program, including free college, according to the company.
“Wherever you can differentiate yourself is pretty critical,” said Marvin Boakye, Papa John’s chief people and diversity officer.

Wherever you can differentiate yourself is pretty critical.

Marvin Boakye
Papa John’s chief people and diversity officer

Other big corporate names, such as McDonald’s, T-Mobile, Amazon, Home Depot, Target, Walmart, UPS, FedEx, Chipotle and Starbucks, also have programs that help cover the cost of going back to school. Waste Management will not only pay for college degrees and professional certificates for employees but also offers this same benefit to their spouses and children.
Of course, employers paying for their employees to get a degree is not new. For decades, businesses have picked up the tab for white-collar workers’ graduate studies and MBAs.
However, many companies are now extending this benefit to front-line workers — such as drivers, cashiers and hourly employees — as well as heavily promoting the offering more than they have before.

Education benefits are ‘mutually beneficial’

For employers, education-as-a-benefit is “mutually beneficial,” said Fidelity’s head of benefits, Megan Bourque.
“For associates that have pursued undergraduate degrees, they have greater retention, greater mobility within the organization and tend to perform better, as well,” she said.
Chipotle Chief Financial Officer Jack Hartung told CNBC that employees who take advantage of the company’s free degrees are 3.5 times more likely to stay with the company and seven times more likely to move up into management.
Not only does free or discounted higher education improve recruitment and retention, it also cuts down on student debt while advancing the long-term well-being of employees, experts say.

Despite the advantages and what research shows is a strong desire among respondents to go back to school, less than half of employees said they have been able to pursue educational goals in the last several years, mostly due to the time commitment and financial obstacles, according to research by Bright Horizons.
The struggle is even greater among minority groups, Bright Horizons found: 44% of Black employees said they are having trouble affording education, compared with 29% of white employees.
There’s a similar discrepancy among men and women. Roughly 36% of working women report financial barriers to education, compared with 22% of men.
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Bob Pisani, CNBC
Scott Mlyn | CNBC

Thinking of writing a book? You might want to reconsider.
On Monday, a federal judge blocked Penguin Random House’s proposed purchase of Simon & Schuster, agreeing with the Justice Department that joining the two giant publishing houses would lessen competition for top-selling books.

As an author, I agree with this, except that there are startlingly few top-selling books.
Most authors would be better off working at a McDonald’s.

Hey, I wrote a book!

I just published a book: “Shut Up and Keep Talking: Lessons on Life and Investing from the Floor of the New York Stock Exchange.” It’s is a summary of what I’ve learned about financial markets while working at CNBC and on the NYSE floor for the past 25 years. 
My publisher, Harriman House, was thoroughly professional and a delight to work with.
This is the part where authors like to say, “It was a labor of love.”

Here’s the truth: It took two years of my life, working every single weekend, and one or two nights a week.
Every weekend. For two years. A labor of love? I love the product, and I’m glad I wrote the book.
 But getting there was brutal.

Writing a book? Forget about making money

Dreaming of six-figure advances for that masterpiece you have in your head? Forget about it.
If you want an idea of how ridiculous the book publishing industry is, look no further than the proposed Penguin Random House-Simon & Schuster merger. The Justice Department is attempting to block the merger, arguing that the combined entity would diminish competition among the biggest houses and push down advances for authors. A federal judge has agreed and blocked the deal from going through. Penguin Random House has said it would appeal.
Many interesting statistics have emerged from the trial. The good news: Book sales were strong during the pandemic. That’s understandable, considering so many people stayed at home.
The bad news: Only a tiny fraction of books make most of the money.
The New York Times reported that during their testimony, Penguin Random House executives said that just 35% of the books the company publishes are profitable, and just 4% account for 60% of those profits.
In 2021, fewer than 1% of the 3.2 million titles that BookScan tracked sold more than 5,000 copies, according to the Times.
Fewer than 1% sold more than 5,000 copies. 

A typical author is practically living in poverty

Dreaming of six-figure advances for your book? Forget about it. A typical author is practically living in poverty.
A 2018 survey of 5,067 authors conducted by the Authors Guild found that the median income of the authors surveyed had fallen to $6,080 in 2017. That’s down about 50% from 2007, when a joint Authors Guild/PEN survey reported $12,850 in median income (note: I am a member of the Authors Guild).
That is the median income. Earnings from book income alone was a paltry $3,100, indicating that authors were supplementing their incomes through speaking engagements, book reviewing, or teaching. 
No surprise, many authors supplement their income doing other things. Just 57% of published authors derive all of their income from writing-related work. Those who consider themselves full-time authors earned a median income of $20,300, “well below the federal poverty line for a family of three or more,” the survey noted.  
Is anyone making money? As in most things in life, the top 10% appear to be making what little money there is: They reported a median income of $305,000, but again this will include other income sources related to being an author. The top 10% of self-published authors made half that: $154,000.

Why has writing books become such a tough business?

What happened?
The Authors Guild report notes the explosive growth of alternative ways for consumers to spend their time (video and streaming). They also note that Amazon now controls 72% of the online book market in the U.S. 
Also, self-publishing happened: More than one million books were published in the U.S. in 2017 (up from 300,000 in 2009). Two-thirds of those books are self-published, according to a Bowker report cited by the Authors Guild. Self-published authors sell generally sell far fewer books and receive far lower royalties.

What can be done? How about more readers?

You can talk all you want about the lousy publishing business, but what would really help the book business is if people read more and bought more books.
Unfortunately, they’re not doing that. 
A Gallup poll conducted in December of last year found that Americans read an average of 12.6 books during the past year, a smaller number than Gallup has measured in any prior survey dating back to 1990.  The sobering conclusion: “Reading appears to be in decline as a favorite way for Americans to spend their free time.” 
That’s not a surprise. The competition for eyeballs has never been more intense. In 1990, there was no internet. There was no streaming. There were no podcasting.
Now, any fool with an iPhone can start a podcast or become a TikTok star. The media landscape has not splintered: It’s shattered.

And yet, books still get published

Which brings me back to my starting point: What kind of fool would write a book today?
I’m one. 
Here’s my message to would-be authors: You have to really want it. You have to really believe you have something to say. You have to believe it so strongly that you can feel the desire coming out of your skin.
You have to be willing to sacrifice the majority of your free time. And you have to forget the two things you’ll probably want: fame and fortune.
No, in most cases you’ll have to be happy that you were determined to say something and that you had the mental stamina and fortitude to get the damn book over the finish line. That is an accomplishment that you can feel proud of.
And that may be the ultimate reason books still get written: Regardless of how many books you sell or how much you get paid, there is still prestige associated with writing a book.
I’ve been at CNBC 32 years, so I’m well-known in a very small part of the world — the stock market. 
More fame? No. More money? It’s negligible. But the book has increased my visibility and the level of my prestige. I’ve been invited to more conferences and a lot of podcasts.
 And that makes a lot of the sacrifice worthwhile.

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The Federal Reserve raised interest rates for the sixth time this year, citing persistent inflation.
Its also the fourth consecutive 0.75 percentage point increase, which means financing costs will jump for many types of consumer loans.
Here’s how your mortgage, credit card, car loan, student debt and savings could be affected.

The Federal Reserve raised the target federal funds rate by 0.75 percentage point for the fourth time in a row on Wednesday, marking an unprecedented pace of rate hikes.
The U.S. central bank has raised the benchmark short-term borrowing rate a total of six times this year, including 75 basis point increases in June, July and September, in an effort to cool down inflation, which is still near 40-year highs and causing most consumers to feel increasingly cash strapped. A basis point is equal to 0.01 of a percentage point.

A policy statement after the announcement noted that the Fed is considering the “cumulative” impact of its hikes so far when determining future rate increases. Economists are hoping this signals plans to “step-down” the pace of increases going forward, which could mean a half point hike at the December meeting and then a few smaller raises in 2023. Still, stocks tumbled after Federal Reserve Chair Jerome Powell said there were more rate hikes ahead.
“Americans are under greater financial strain, there’s no question,” said Chester Spatt, professor of finance at Carnegie Mellon University’s Tepper School of Business and former chief economist of the Securities and Exchange Commission.
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However, “as the Fed tightens, this also has adverse effects on everyday Americans,” he added.

What the federal funds rate means to you

The federal funds rate, which is set by the central bank, is the interest rate at which banks borrow and lend to one another overnight. Although that’s not the rate consumers pay, the Fed’s moves still affect the borrowing and saving rates they see every day.

By raising rates, the Fed makes it costlier to take out a loan, causing people to borrow and spend less, effectively pumping the brakes on the economy and slowing down the pace of price increases. 

“Unfortunately, the economy will slow much faster than inflation, so we’ll feel the pain well before we see any gain,” said Greg McBride, Bankrate.com’s chief financial analyst.
Already, “mortgage rates have rocketed to 16-year highs, home equity lines of credit are the highest in 14 years, and car loan rates are at 11-year highs,” he said.

How higher rates affect borrowers

• Mortgage rates are already higher. Even though 15-year and 30-year mortgage rates are fixed and tied to Treasury yields and the economy, anyone shopping for a home has lost considerable purchasing power, in part because of inflation and the Fed’s policy moves.
Along with the central bank’s vow to stay tough on inflation, the average interest rate on the 30-year fixed-rate mortgage hit 7%, up from below 4% back in March.

On a $300,000 loan, a 30-year, fixed-rate mortgage at December’s rate of 3.11% would have meant a monthly payment of about $1,283. Today’s rate of 7.08% brings the monthly payment to $2,012. That’s an extra $729 a month or $8,748 more a year, and $262,440 more over the lifetime of the loan, according to LendingTree.

The increase in mortgage rates since the start of 2022 has the same impact on affordability as a 35% increase in home prices, according to McBride’s analysis. “If you had been approved for a $300,000 mortgage in the beginning of the year, that’s the equivalent of less than $200,000 today.”
For home buyers, “adjustable-rate mortgages may continue to be more popular among consumers seeking lower monthly payments in the short term,” said Michele Raneri, vice president of U.S. research and consulting at TransUnion. “And consumers looking to tap into available home equity may continue to look towards HELOCs,” she added, rather than refinancing.
Yet adjustable-rate mortgages and home equity lines of credit are pegged to the prime rate, so those will also increase. Most ARMs adjust once a year, but a HELOC adjusts right away. Already, the average rate for a HELOC is up to 7.3% from 4.24% earlier in the year.
• Credit card rates are rising. Since most credit cards have a variable rate, there’s a direct connection to the Fed’s benchmark. As the federal funds rate rises, the prime rate does as well, and your credit card rate follows suit within one or two billing cycles.
That means anyone who carries a balance on their credit card will soon have to shell out even more just to cover the interest charges. “This latest interest rate hike will most acutely impact those consumers who do not pay off their credit card balances in full through higher minimum monthly payments,” Raneri said.

Because of this rate hike, consumers with credit card debt will spend an additional $5.1 billion on interest, according to an analysis by WalletHub. Factoring in the rate hikes from March, May, June, July, September and November, credit card users will wind up paying around $25.6 billion more in 2022 than they would have otherwise, WalletHub found.

Already credit card rates are near 19%, up from 16.34% in March. “That’s the highest since the Fed began tracking in 1994 and is more than a full percentage point higher than the previous record set back in 2019,” according to Matt Schulz, chief credit analyst at LendingTree. And rates are only going to continue to rise, he said. “We’ve still got a ways to go before those rates hit their peak.”
The best thing you can do now is pay down high-cost debt — “0% balance transfer credit cards are still widely available, especially for those with good credit, and can help you avoid accruing interest on the transferred balance for up to 21 months,” Schulz said.
“That can be an absolute godsend for folks struggling with card debt,” he added.
Otherwise, consolidate and pay off high-interest credit cards with a lower-interest home equity loan or personal loan, Schulz advised.
• Auto loans are more expensive. Even though auto loans are fixed, payments are getting bigger because the price for all cars is rising along with the interest rates on new loans, so if you are planning to buy a car, you’ll pay more in the months ahead.
The average interest rate on a five-year new car loan is currently 5.63%, up from 3.86% at the beginning of the year and could surpass 6% with the central bank’s next moves, although consumers with higher credit scores may be able to secure better loan terms.

Paying an annual percentage rate of 6% instead of 5% would cost consumers $1,348 more in interest over the course of a $40,000, 72-month car loan, according to data from Edmunds.

Still, it’s not the interest rate but the sticker price of the vehicle that’s causing an affordability problem, McBride said. “Rising rates doesn’t help, certainly.”
• Student loans vary by type. Federal student loan rates are also fixed, so most borrowers won’t be affected immediately. But if you are about to borrow money for college, the interest rate on federal student loans taken out for the 2022-2023 academic year are up to 4.99%, from 3.73% last year and 2.75% in 2020-2021.
If you have a private loan, those loans may be fixed or have a variable rate tied to the Libor, prime or T-bill rates, which means that as the Fed raises rates, borrowers will likely pay more in interest, although how much more will vary by the benchmark.

Currently, average private student loan fixed rates can range from 3.22% to 14.96%, and from 2.52% to 12.99% for variable rates, according to Bankrate. As with auto loans, they vary widely based on your credit score.

Of course, anyone with existing education debt should see where they stand with federal student loan forgiveness.

How higher rates affect savers

• Only some savings account rates are higher. The silver lining is that the interest rates on savings accounts are finally higher after several consecutive rate hikes.
While the Fed has no direct influence on deposit rates, they tend to be correlated to changes in the target federal funds rate, and the savings account rates at some of the largest retail banks, which have been near rock bottom during most of the Covid-19 pandemic, are currently up to 0.21%, on average.
Thanks, in part, to lower overhead expenses, top-yielding online savings account rates are as high as 3.5%, according to Bankrate, much higher than the average rate from a traditional, brick-and-mortar bank.
“Savers are seeing the best yields since 2009 — if they’re willing to shop around,” McBride said. Still, because the inflation rate is now higher than all of these rates, any money in savings loses purchasing power over time. 
Now is the time to boost that emergency savings, McBride advised. “Not only will you be rewarded with higher rates but also nothing helps you sleep better at night than knowing you have some money tucked away just in case.”
“More broadly, it makes sense to be more cautious,” Spatt added. “Recognize that employment is maybe less secure. It’s reasonable to expect we’ll see unemployment going up, but how much remains to be seen.”
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