CORPUS CHRISTI, Texas — You’ve been seeing how inflation is affecting everything like groceries, housing and gas.
In order to curb inflation, the federal reserve is raising the interest rate by half a percentage point, the biggest rise the U.S. has seen since 2000.
That will affect people who have federal loans and credit cards.
One Corpus Christi resident we spoke with said she had 22 credit cards last year and now she’s down to 10.
She said some of those interest rates are variable, meaning they can fluctuate. She said it’s been challenging to cut spending because she loves to shop, but said it would be worth it in the end.
“I have cut back on some of the other things I would do like travel and a little more extravagant things until I pay them off,” she said.
Dr. Jim Lee, professor of economics at Texas A&M University-Corpus Christi said the federal reserve is hoping to lower inflation by raising interest rates.
“It is to discourage people’s borrowing and spending, but to encourage people’s savings,” Dr. Lee said.
He said when we spend too much, that is what causes inflation.
Lee said the stock market is already being affected by rising interest rates and even though some people might not invest in stocks, retirement plans will also be affected.
“More than half of Americans, they relied on either mutual funds or stock markets to finance their retirement,” he said.
Lee said we could see what economists call a “soft landing,” or a slowing of economic growth, and this could be just the beginning of rising interest rates.
He said it could be another two years before interest rates stop going up.
However, some Corpus Christi residents, like Tony Medina, said he doesn’t have a credit card or loans.
He said he avoids interest rates raising the prices on things he purchases by paying his credit cards off on time.
“I usually pay them off before the day and so I don’t have no problem,” Medina said.