Aug. 1 - The debt deal in Washington creates new uncertainty for consumers in managing their current finances and trying to plan for their financial future. Bobbi Rebell reports.
The U.S. government may have averted a default but for the average consumer, the messy negotiations that it took to get a deal and the remaining possibility of a credit downgrade for the country, remain threats to their own financial stability. Eleanor Blayney is the consumer advocate at the CFP board. SOUNDBITE: ELEANOR BLAYNEY, CONSUMER ADVOCATE, CERTIFIED FINANCIAL PLANNER BOARD OF STANDARDS (ENGLISH) SAYING: "We may see slightly higher interest rates as a result of the uncertainty about just having watched this political process, how able are we to deal with our budget issues, and that will be reflected in higher risk that will be attached. So that will impact consumers with any loans that they have." Those loans include mortgage rates, especially for consumers that have taken on adjustable rate loans like home equity lines. Other rates that could be affected include credit cards- which could dampen spending just as back to school season kicks into high gear. But for those with some cash in the bank, there is an upside: SOUNDBITE: ELEANOR BLAYNEY, CONSUMER ADVOCATE, CERTIFIED FINANCIAL PLANNER BOARD OF STANDARDS (ENGLISH) SAYING: "Certainly if interest rates go up and they are able to deploy- use that cash to lock in some higher rates particularly for retirees. I mean they have been bemoaning the fact that the rates of return on money market or CD's are so low so this may give them a window of opportunity of getting higher interest rates. So that's a little bit of a silver lining in a very dark cloud. " That dark cloud in the debt deal is that it could include an overhaul of the tax code and restructuring benefits like the Medicare elderly health program. But as it stands now, Social Security, Medicaid and benefits for veterans and the poor would be exempt. Bobbi Rebell, Reuters