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Downgrade in credit rating sparks worry - Live5News.com | Charleston, SC | News, Weather, Sports

Downgrade in credit rating sparks worry

 "The downgrade will mean a potential increase in interest rates on auto loans, credit cards, mortgages," John Panagiotou, a financial advisor, said.

In other words, he said it could affect anything that has to do with lending.

He said the U.S. Treasury is a benchmark for interest rates, meaning the next time you go to the bank to buy a car or a house, your interest rates could increase.

Last Friday, Standard and Poor's cut the U.S.'s perfect AAA credit rating to AA-plus.

For those of you working, Panagiotou said the downgrade could affect mutual funds, hitting your 401k or retirement savings plans.

For students, accounts for college savings like the 529-plan, for example, would also take a hit. The money you thought would cover tuition may not.

"They'd be subject to market risk and that's less money in the market," Panagiotou said.

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