(WFXR) — Many economists are calling it “the boldest move” as the Federal Reserve hiked interest rates Wednesday by 0.75 percentage points for the first time since 1994.

As a result of increased interest rates, Dr. Raman Kumar — a professor of investment management at Virginia Tech’s Pamplin College of Business — says Americans can expect to pay more for home loans, car loans, and credit cards.

“Right now, it seems that the only way that can bring down inflation is by hurting the demand,” said Kumar.

He believes the Federal Reserve is doing everything it can to keep inflation down.

“Once that inflation comes back under control, say 2 to 3% — right now it’s around 8 to 8.5% — it comes down, that immediately increases the spending power of people,” Kumar explained.

The professor says this will not happen overnight, adding that it may take years. Meanwhile, Americans will experience some heavy financial impacts, such as concerns about their credit card bills.

“Taking a vacation, by putting all the tickets and hotel bills on your credit card and then paying monthly payments with interest rather than paying off the credit card bill right at the end of the month,” said Kumar.

However, that is not the only impact.

Besides credit cards, Kumar says the situations where Americans borrow the most money for the sake of spending it are home loans and car loans. In order to resolve this, he recommends buying cheaper or more cost-effective homes, as well as non-luxury or used cars.

One Roanoke mother, Emmanuela Booth says she may have to switch things up before her expenses get too high, adding that it’s become disheartening to see costs rising.

“I’m planning on maybe staying home, with this third baby on the way, and looking into working from home and just picking up side gigs as much as we can to make ends meet,” Booth told WFXR News.

Meanwhile, when it comes to financial investing, Kumar says the interest rate hike has both a positive and negative effect on long-term and short-term investments.

“The longer the investments as interest rates are hiked, their value drops,” Kumar explained.

Although, on the short-term investments, the Virginia Tech professor says they will be earn more money in their bank accounts and saving accounts as interest rates increase.

However, this may cause the stock market to drop because of the spike in interest rates, so the economy will begin to slow down as a result.

According to Hal Reynolds — financial advisor and branch manager for IFA Wealth in Roanoke — investors should play it smart amid these current economic circumstances.

“Study after study shows that investors tend to get out of the market at a bad time,” Reynolds said. They also tend to get back into the market at a bad time, so it’s better, probably, to un-emotionally review your long-term goals.”

Kumar says the best advice for Americans is to pay attention each month to whether or not the Federal Reserve will continue to increase Interest rates. This will have an impact on inflation.