What is the primary effect of increasing interest rates on consumer spending?

When interest rates increase, borrowing money becomes more expensive. This means that loans for things like cars, homes, or personal expenses have higher monthly payments. As a result, people may decide to spend less because they need to save more to pay off these loans or avoid taking them altogether. For example, if someone was planning to buy a new car but sees that interest rates have gone up, they might choose to wait or buy a cheaper car instead. Overall, higher interest rates usually lead to lower consumer spending, which can slow down the economy.