Fed rate hike could cost you more

Most of what you'll hear and read about the feds increasing their interest rates will be positive toward the long term future of the U.S. economy.

Jeremy Hill, of the Wichita State Center for Economic Development and Business Research, agrees, but points out in the short term this will cost consumers.

"Cash cost more today, and it will cost more in a few months when they are likely to raise rates again. Those people that are holding a lot of cash, that's where you will see a lot more cost,” Hill explained.

Hill says one income group will especially feel the hike.

“I'm really concerned about that lower to middle income group. That's the group that has not had increases in wages. There hasn't been a lot of job creation, but yet we've had inflation. Their budgets have been getting tighter and tighter and tighter.”

He says those tighter budgets have led to more credit card debt. Credit card debt will see an immediate increase, as will short-term and adjustable rate loans. Things like buying a car or home will cost more with the higher rates.

"It's a double edged sword in a way,” says Mitch Crouch, Senior Vice President of Busey Home Mortgage. “Short term rates will go up, but it has a tendency to stabilize the long term market, because inflation is the biggest factor for interest rates on long term bonds."

Crouch anticipates a temporary small drop in the fixed rate loans, that will eventually increase with more Fed rate hikes to come, and an immediate increase on the adjustable rate loans.

"I'm not sure a home buyer is going to get hurt, if they take a 30-year-fixed, they might actually see a little bit of improvement,” Crouch says. “If they are taking an adjustable rate mortgage, they might see that go up just a little bit."

Hill says the benefits will ideally come for businesses that re-invest their money and start spending again. And even for the consumers who will pay more, he says let this be a warning not to play the waiting game.

"There are still opportunities. This doesn't have to be all negative. This means if you were thinking about a car loan, or you were thinking about some other things, you better go do it now. If you are thinking about a home today, you can't sit any longer."