Local experts say rising interest rates can be turned into extra cash

Since the announcement by Fed Chair Jay Powell that the Federal Reserve was raising its benchmark interest rate by three-quarters of a percentage point, the highest rate increase since 1994, many people have worried the hike will cost them money. 

RELATED: Federal Reserve raises key interest rate 0.75 percentage points as it tries to calm inflation

With mortgage rates rising, credit card debt likely increasing and money more expensive to borrow, it might be hard to feel optimistic about the financial future. 

However, experts said it doesn't have to be all doom and gloom, and that there are money-making opportunities when interest rates go up. 

"If you are saving money in a bank where they adjust the rates regularly, like in a money market account, your interest rate has probably already risen and will continue to rise as interest rates rise," said finance professor Larry Harris.  

Harris, who is a finance professor at the University of Southern California's Marshall School of Business, said that if you have money to save, now is the time to put it away and that series I bonds have risen to a historical high of 9.62%. 

"The series I bond is an inflation adjusted bond, which means that you're given a return that also includes the rate of inflation. So, when inflation goes up, the money you make on this bond rises," Harris said. 

You can purchase $10,000 in series I bonds each year and must hold them for at least that long. If you don't want to lock up your money, some banks will even offer interest on checking accounts. 

"Right now, if you log on and check online banks, interest rates have risen to almost a percent or higher. That's what people were locking into for three to five years in the CD's just about a year ago," said Louis Barajas, a certified financial planner. 

Barajas also said that everyone should pay off their credit card debt now if they can. 

"Because we know those credit cars are going to go from an average of 16% to maybe 19% or 20%," he said. 

Sheyda Darian is 25 years old and plans to start saving now, so she doesn't have to give up the things she enjoys. 

"How can I make more, so that way I can continue my spending habits, because I like buying my coffee and going out to eat. So, I don't want to cut back if I can make more," she said. 

Experts said that getting relief from inflation generally takes about as long it took to get into it, which is about six years in this case, though they said there should be some small gains in about a year.