Despite budget deal, some still worry about impact of impasse in Washington
5:53 PM, Oct 16, 2013
7:30 PM, Oct 16, 2013
WEST PALM BEACH, Fla. -- Despite the glimmer of compromise to fund the government and raise the debt ceiling that emerged from Capitol Hill on Wednesday, some South Florida residents worried about the long-term impact of the impasse.
Carlos Llerena, a West Palm Beach resident, said he was surprised to receive a letter from his bank that the annual percentage rate on some of his credit cards would rise by as much as three percent.
"I was shocked," Llerena said. "It's going to be another issue for the economy."
Kevin Maher, a community outreach director at DebtHelper.com, said some banks may have preemptively raised the interest rates of some credit cards because of the uncertainty in Washington.
"The problem with rates going up is not how fast you're going to pay the debt down, it's [that it's] actually going to increase the minimum payment," Maher said. "For people that are living on a tight, shoestring budget, if their rates go up and their payments go up they may go from just barely breaking even to being underwater on their bills."
Elsewhere, some residents were concerned about the potential impact of the impasse on their retirement.
Sue Apostolico, a Palm Beach resident, said she depended on her retirement savings account to be able to pay for her monthly expenses.
"If you have people like us that are retired that [are] just living on income we worked our whole lives for -- and, it's not getting interest down the line so our retirement will be secure -- that hurts, too," Apostolico said.
Maher said a default on the debt owed by the federal government could hurt the stock market.
"We see this and say, "End of the world again." We've ended the world a dozen times since the 1950s," Maher said. "There are still certain principles that are going to protect you. You need to be away from the volatile [stocks] if you're approaching retirement."
Even if stocks lose some of their value, Maher and other financial analysts said the stock market would eventually rebound.