Win McNamee/Getty Images

Win McNamee/Getty Images

The Federal Reserve will hike short-term interest rates this afternoon, so now is the time to pay down the balances on your credit cards and home equity lines of credit.

The increase is almost certain to be one-quarter of a percentage point, meaning interest rates on credit cards and home equity lines of credit will go up the same amount. According to futures markets, there’s almost no chance that the Fed will leave the federal funds rate unchanged.

What you can do

Save money by paying down the balances on credit cards and your home equity line of credit. You also can move your credit card debt to a low-interest balance transfer card.

Home equity lines of credit are popular again, now that homeowners have regained equity following the housing crash. In many cases, the interest rates are attractive.

Auto loan interest rates will rise after the Fed rate hike.

You probably should wait to buy a certificate of deposit, especially if it’s short-term, because rates on CDs might rise after the Fed hikes rates. That’s one of the surprising benefits of a Fed rate increase.

What Yellen said

March 3, Fed Chair Janet Yellen hinted strongly that the central bank would raise rates this week. A rate hike became virtually certain last week, when the February employment report reflected strong job creation and wage gains.

As for home loans, the market already had baked a Fed rate hike into the rate cake, which is why mortgage rates went up last week to a nearly three-year high. Unfortunately for homebuyers, mortgage rates probably will continue to climb this week, according to the mortgage experts who vote in Bankrate’s weekly Rate Trend Index.

That’s why you shouldn’t delay, and you should get a mortgage as soon as you can before rates (and home prices) rise even further.

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