Borrowing

Why Our Debt Just Got Pricier—and We're Changing Our Passwords (Again)

Number of the Week: 0.50-0.75 percent

Last week, the Fed bumped up the federal funds rate—which affects what lenders charge us for things like loans and credit cards—by another .25 percent. Then it said to expect three more rate hikes in 2017. Merry Christmas!

Higher interest rates generally signal a strong economy, so there’s that. They also mean our credit card debt, and anything else with a variable interest rate, just got more expensive. As if we needed more incentive to pay it off.

It’s probably time to pick a new password.

Last week, Yahoo announced a major data security breach that actually happened in 2013. And by major, they mean a billion—yeah, with a ‘b’—user accounts may have been hit. Oops.

Feel like you’ve been down this road before? You have… Back in September, the company made a similar announcement. That time, it was a 2014 breach, affecting at least 500 million.

So, what? Neither hacking directly revealed credit card or bank account info, but it still raises plenty of privacy concerns. (Not to mention questions about why it took a technology company three years to identify a billion-user breach.) The more personal information a cybercriminal has about us, the more vulnerable we are to identity theft and financial fraud.

Bottom line: If you play fantasy sports, track a portfolio or have an email account with Yahoo, or you’ve posted photos on Flickr, it’s probably a good idea to upgrade your password and security question. Now. And, yes, if you use the same or a similar info on any other accounts, change those, too.

Other defensive moves: Keep an eye out for any suspicious activity in your financial accounts, regularly check your credit report and be wary of clicking on any links from strangers.

Traders track Trump tweets. (But that doesn’t mean we should.)

On December 12, President-Elect Donald Trump

about Lockheed Martin’s F-35 fighter-jet program. (Basically, he thinks the costs are overblown.) The company’s stock had already been slipping since December 1. But those 140 characters may have contributed to 2.5 percent of the stock’s loss this month.

earlier in December about the cost of Air Force One, and the stock slipped about 1 percent before it recovered. (It’s still up about 9.3 percent for the year, as of December 16.)

So, what? Some traders are trying to place market bets according to which companies are setting off the President-elect at the moment. That’s a risky bet and could end up causing some unexpected volatility for certain stocks and sectors.

Bottom line: This kind of action might seem important, considering the comments are coming from America’s highest office. But we’re not sweating it.

Long-term investors shouldn’t worry about daily market movements, let alone second-to-second rides of certain companies based on off-the-cuff tweets. Plus, we’re usually better off steering clear of individual stocks anyway and diversifying our money across mutual funds and ETFs, which are designed to be less influenced by one stock or one man—even if he is the President.

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