Credit card rates to go higher next year according to Suze orman

Next year [2015] could be even more expensive for anyone carrying credit card debt.

As you better know by now, the interest you are charged on an unpaid credit card balance is tied to any movement in whatever benchmark index or rate the card issuer uses. Many credit cards use the prime rate (the lowest rate of interest at which banks lend money) as their benchmark. Since December 2008, the prime rate has been stuck at 3.25 percent.

That's all about to change.

What you need to understand is that the prime rate is itself tied to the federal funds rate. That's the interest rate controlled by the Federal Reserve and, if you've been following things lately, you know the expectation is that—for the first time since the financial crisis—the Federal Reserve will raise the federal funds rate in 2015. Not a lot, but it will go up.

My friends, when that happens, the prime rate will rise too, and that will trigger increases in the interest charged on credit card balances.

As part of its work checking on the health of our big banks post-crisis, the Federal Reserve issues a periodic stress test of banks' financial health. As part of that stress test the Fed has to make some interest rate and economic assumptions about what may happen in the future. In its most recent "baseline" scenario—that is, if things go as expected with no big shocks to the system—the Fed expects the prime rate to rise to 4 percent by the end of 2015, and estimates it could reach 5.4 percent by the end of 2016. That guarantees the interest rate on your credit card debt is heading higher.

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Suze Orman is a award winning certified financial planner and author of several books including 'The Road to Wealth'. She went from being a waitress at age 30, making $400 a month, to now having her own TV show and a net worth of $30 million dollars.

Suze Orman does not like credit card debt

You know how much I hate credit card debt, given the astronomical interest rates you are stuck paying. Although the average is around 14 percent, I know plenty of you pay more than 20 percent interest. 

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Suze Orman is a award winning certified financial planner and author of several books including 'The Road to Wealth'. She went from being a waitress at age 30, making $400 a month, to now having her own TV show and a net worth of $30 million dollars.

Suze Orman praises Tim Cook for being open

Tim Cook's coming out publicly will be the door opener for a lot of other people that so want to come out but they're just afraid to do so.

He's going to feel more powerful,' she predicts. 'A more powerful person is a better leader, a better leader makes a better company, and I hope it shows up one day in Apple's performance.

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Suze Orman is a award winning certified financial planner and author of several books including 'The Road to Wealth'. She went from being a waitress at age 30, making $400 a month, to now having her own TV show and a net worth of $30 million dollars.

Suze Orman on Satya Nadella of Microsoft

I am a big believer in karma. But to suggest that good karma should be the lynchpin of managing your career is not just wrong, but dangerous.

Yet that's what Satya Nadella, the chief executive officer of Microsoft offered up as advice to working women at a recent women's conference: "It's not really about asking for the raise, but knowing and having faith that the system will actually give you the right raises as you go along," Nadella said. "That's good karma. It will come back. That's the kind of person that I want to trust, that I want to give more responsibility to."

I couldn't disagree more. Yet in a perverse way I am glad Mr. Nadella brought this issue into the spotlight. That the chief executive of the 34th largest company in the Fortune 500—with profits of nearly $22 billion on revenue of more than $78 billion—said this should be a wake-up call to every woman. This was not some outlier start-up entrepreneur looking to provoke.

What would Nadella's daughters say?

Yes, Mr. Nadella backtracked as quickly as the backlash began, but it would be wise for every woman to take Mr. Nadella at his original word. The fact is, whether an explicit strategy or implicit assumption, management preys on women's propensity to not negotiate, to be consummate team players, to be passive.

One telling academic study reported women equate a salary negotiation on par with the uncomfortable—and sometimes painful—experience of a trip to the dentist. In the same study, men viewed salary negotiation as a game to be won. Okay, so it's not typically in our DNA. That just means having to make a conscious effort to override what may not come naturally.

To suggest that good karma is all women need only fuels this dangerous mindset. It plays into what I see so many women hope to be true: that their good nature, get-along, consensus-building nature will be rewarded without asking. That's naïve. We're still dealing with a gender pay gap across diverse professions that often has women working at a discount of 20 percent to 30 percent less than what their male colleagues earn.

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So much for karma as a negotiating tool.

Mr. Nadella has since communicated to Microsoft employees that he got it wrong. His advice: "If you think you deserve a raise, you should just ask." In a vacuum, that advice is fine. Rather than wait for karma to get your manager to acknowledge your contributions and value, be proactive. The problem in all too many offices is that being your own best advocate often gets women labeled as agitators or pushy. Or, yes, bossy.


And then there's the art of asking; something women also tend to struggle with. "Can I have a raise?" or "I deserve a raise" or "I am overdue for a raise," is not the way to go. Where's the power in that? Ask for a meeting to discuss your compensation; get it on the schedule. This is not some "oh, by the way" item you mention at the end of a meeting. In advance of the meeting, prepare a one-page list of what you have accomplished. Be as specific as possible. Run through the deliverables you nailed and goals you met (and exceeded). Then in the meeting, you do not ask for a raise. You state your case: "I deserve a raise of at least X." The phrase "at least" is crucial. You have just set expectations and your floor. You are negotiating from a position of confidence and power. That is going to pay off.

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Suze Orman is a award winning certified financial planner and author of several books including 'The Road to Wealth'. She went from being a waitress at age 30, making $400 a month, to now having her own TV show and a net worth of $30 million dollars.

Suze Orman advise on retirement [VIDEO]

Suze Orman on NBC interview September 2014

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Suze Orman is a award winning certified financial planner and author of several books including 'The Road to Wealth'. She went from being a waitress at age 30, making $400 a month, to now having her own TV show and a net worth of $30 million dollars.

Suze Orman nominates Kathy Griffin to do ALS ice bucket challenge

53-year-old comedian, Kathy Griffin, took the ALS Ice Bucket Challenge not in a bikini or sweatpants, but with nothing- only her red high heels. She takes the challenge completely naked as she called it “taking it up a notch”.

When asked why she did it nude, Griffin made it clear that she was nominated by Suze Orman who told her to do the challenge on full commando.

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Suze Orman is a award winning certified financial planner and author of several books including 'The Road to Wealth'. She went from being a waitress at age 30, making $400 a month, to now having her own TV show and a net worth of $30 million dollars.

Suze Orman was once living in her Van

The well-spoken writer, TV personality and Emmy-winning financial adviser, who has published numerous New York Times bestsellers, could not afford to move out of her van when she first moved to Berkeley, California, in the 1970s.

Today Suze Orman is worth an estimated $35 million.

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Suze Orman is a award winning certified financial planner and author of several books including 'The Road to Wealth'. She went from being a waitress at age 30, making $400 a month, to now having her own TV show and a net worth of $30 million dollars.