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Jason Noble, CFP®, RICP®, financial advisor in Charleston with Prime Capital Investment Advisors (also known locally as PCIA Charleston), recently appeared on ABC’s Lowcountry Live to discuss interest rates.

High interest rates can be a good thing if you are being paid interest on an interest-bearing account like a bank CD or fixed annuity, but not so good when you are paying interest—especially variable interest which goes up and down based on the interest rates determined by the Fed.

The interest rate on credit cards is often variable, and so are HELOCs (home equity lines of credit) and similar accounts.

NOTE: It’s great idea to have a plan to pay down debt—especially credit card debt as well as debt that has a variable interest rate. You can use the snowball method (paying off the smallest loans first) or the avalanche method (paying off the loans with the highest interest rates first).

Speaking of which, home loans used to be a lot lower. You could get a mortgage rate as low as 3 to 3-1/2% a few years ago—now the interest rates on home loans are around 6-1/2 to 7% or more, which can make payments much higher. And, as you probably know if you are looking to purchase a home right now, on top of the higher mortgage rates, the prices of homes themselves have also risen.

A 30-year fixed mortgage for $400,000 at 3% would mean a monthly a payment of $1,686; if the interest rate is 7% the payment would be $2,661.

You can consider refinancing debt or finding other sources for money outside of the banking system—a financial advisor can have these kinds of conversations with you. And if you want to take advantage of the higher interest rate environment, there are some tactical options available like money mutual funds and cash alternatives. It all depends on how quickly you need the money and other factors.

Every person’s situation is completely unique.

If you are not happy with the performance of your portfolio or your financial or retirement plan, you can always reach out for a second opinion from a financial professional. In a higher interest rate environment and in today’s economy, certain investments tend to do better than others. But it all depends on your goals, too, and whether or not you have a value tilt versus a growth tilt to your wealth strategy.

If you’re looking for a second opinion on your current strategy, or want to build a financial or retirement from scratch, remember, we are here to help with the complexities of planning while keeping your financial goals in focus. Give Jason Noble, CFP®, RICP® financial advisor in Charleston, a call today at (843) 743-2926 to take the first step toward designing a portfolio tailored to your life dreams and ambitions.

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This information does not constitute legal or tax advice. PCIA and its associates do not provide legal or tax advice. Individuals should consult with an attorney or professional specializing in the fields of legal, tax, or accounting regarding the applicability of this information for their situations.

Advisory products and services offered by Investment Adviser Representatives through Prime Capital Investment Advisors, LLC (“PCIA”), a federally registered investment adviser. PCIA: 6201 College Blvd., Suite 150, Overland Park, KS 66211. PCIA doing business as Prime Capital Wealth Management (“PCWM”) and Qualified Plan Advisors (“QPA”). Certain services may be provided by affiliates of PCIA.

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