Mortgage rates should rise slightly this year, but credit-card interest rates for consumers with excellent credit should remain competitive, experts say.

Mortgage rates were at almost the lowest levels imaginable in 2013, but should rise gradually this year, said Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas at Fayetteville.

Predictions last year that the Federal Reserve planned to begin to taper its monthly purchase of bonds moved markets to respond as if the Fed was actually going to begin cutting back on its asset purchases, Deck said.

“In response to that, we saw interest rates rise,” Deck said.

Now that the Fed has officially begun tapering, it is likely that there will be a gradual increase in interest rates, particularly mortgage rates, throughout the year, Deck said.

The average interest rate on a 30-year fixed-rate mortgage rose to 4.69 percent this week, the third straight week it has risen, according to Bankrate.com’s national survey. The aver-age 15-year fixed mortgage rate was 3.73 percent this week, said Bankrate.com, a publisher, aggregator and distributor of personal financial information on the Internet.

The 30-year rate was at 3.58 percent at the beginning of 2013, Bankrate.com said.

Greg McBride, a senior financial analyst with Bankrate. com, said the 30-year rate likely will hit 5 percent in the first half of this year and could go as high as 5.5 percent in the second half of 2014, if the economy continues to improve.

“The higher mortgage rates are the results of an improving economy,” McBride said. “If rates move up too quickly, it can take some steam out of the economy, particularly the housing market. That’s what we saw in the second half of 2013 when mortgage rates jumped up dramatically and it took a bite out of demand.”

Rates on long-term bonds will work their way higher this year, said Bill Tedford, an executive vice president and portfolio manager with Stephens Inc. in Little Rock.

The rate on a 10-year bond is about 3 percent but should be 3.25 percent or 3.5 percent by the end of the year, Tedford said.

“It could be a lot worse than that if inflation upticks, but our inflation model for this year is saying that inflation is probably going to be pretty quiet,” Tedford said.

Inflation is at about 1.25 percent now, and Stephens doesn’t expect inflation evento return to 2 percent, Tedford said.

Bond investors should tweak their portfolios to focus on shorter duration bonds, Richard Madigan, chief investment officer for JPMorgan Private Bank, told The Associated Press. He would normally tell investors to have bonds that mature in an average of about five years, Madigan said. But for this year, Madigan advises investors to aim for an average duration of about two to 2.5 years.

A consumer’s credit rating will have the biggest effect on his credit-card interest rate, McBride said.

“Cardholders with strong credit will continue to see very compelling offers, such as zero percent for up to 18 months,” McBride said. “But consumers with weaker credit are more likely to see their rates inch higher.”

Short-term interest rates will remain low, McBride said.

“That means savings rates and borrowing rates are not going to change a lot this year,” McBride said. “Savings accounts, money market accounts and short terms [certificates of deposit] will continue to languish with record lows.”

McBride’s advice for consumers this year is first to “put the hammer down” and pay down credit-card debt or the balance on a home-equity line of credit.

“From a borrower’s perspective, it pays to get your ducks in a row and be prepared [for interest to rise],” McBride said. “Do what you can now to pay down debt while rates are low before rates start to move higher.”

Business, Pages 23 on 01/03/2014