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CNBC
29-04-2025
- Business
- CNBC
How to prepare for a debt-relief consultation
A debt-relief consultation is the first step to seeking help from a debt-relief company. In this introductory call, you'll learn about the services a company offers and talk through the best options for dealing with your debt. Follow these tips to prepare and get the most out of a debt-relief consultation. $7,500 Settlement fee is 15% to 25% of enrolled debt. $9.95 escrow account set-up charge and $9.95 monthly service fee Not available in Colorado, North Dakota, Oregon, Rhode Island, Vermont, West Virginia, Wisconsin, Wyoming or Washington, D.C. Freedom Debt Relief has resolved over $19 billion in outstanding debts since 2002. It offers free credit card debt relief consultations. Before the call with a debt-relief company, put together an overview of your debts. This will help guide your conversation so you have a clear picture of the support you need. Check your bank account for your debt payments and get a free credit report through an app like Credit Sesame or Credit Karma so you have a full list of your debts. For each debt, note: Not all debt-relief companies offer reliable service, and the industry is vulnerable to scams. Before you get on a consultation call, prepare these questions to make sure the company is legitimate: Debt-relief companies focus on negotiating a debt settlement that reduces your balance so you can pay it off in a lump sum or through a payment plan. This may not be the best option for everyone. During the consultation, you should learn about debt-relief options beyond what the company offers, in case those are a better fit for your situation. Ask how the various options might impact your debt, and be skeptical if a debt consultant is unwilling to provide information about options beyond their services. Consider these debt-relief options: Not all debts will qualify for some kind of relief, and you won't know until you've negotiated with creditors. CFPB warns against working with debt-relief companies that guarantee they'll make your debt go away or promise a percentage reduction. While you're in a debt-relief program, you'll likely set aside money into a dedicated account the company will use toward settlements. In addition to those (usually monthly) payments, creditors can continue to charge your monthly minimum payment, interest and late fees (if you miss payments). Before talking with a debt-relief company, review your monthly resources to figure out how much you can spare toward debt settlement expenses. Talk with the representative during your debt consultation about the monthly payments you'll be expected to make. Take time to review how that fits into your financial plan before you commit to a program. Also note that you usually have to report forgiven debt as taxable income, and your credit score will likely take a hit for any forgiven debt. Make a plan to rebuild your credit after the settlement. Money matters — so make the most of it. Get expert tips, strategies, news and everything else you need to maximize your money, right to your inbox. Sign up here. At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every debt-relief product review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of debt-relief products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
CBS News
24-03-2025
- Business
- CBS News
Will credit card interest rates drop soon? Experts weigh in
Credit card interest rates and balances have been on a roller coaster over the past several years, and inflation has been a key contributing factor. For example, in November 2024, the latest month for which the Federal Reserve provides data, the average credit card interest rate sat at about 22%, up considerably from a low of about 15% during the pandemic. Meanwhile, credit card balances have also risen recently, a stark contrast to how revolving credit debt fell by more than $120 billion in 2020 when rates were much lower in 2020. While cardholders were able to pay down debt during that lower-rate time, when you fast forward to 2025, it's clear that today's high-rate environment is having a big impact, with credit card balances sitting at a record high of $1.21 trillion nationwide. Given today's high rates and high credit card balances, millions of cardholders would significantly benefit from credit card rates easing soon. But is that going to happen? Here's what experts say. Find out how to start tackling your expensive credit card debt now . Today's high credit card rates can be blamed, at least partially, on inflation, experts say. "When inflation is high, lenders need to charge more so that the money they get back from borrowers won't have lost value to inflation by the time it's repaid," says Richard Barrington, a CFA and financial analyst for Credit Sesame. "Also, when inflation is rising, the Fed tends to raise interest rates, which affects the borrowing costs of banks. So, in general, it's fair to expect credit card rates to rise when inflation rises and fall when inflation falls." Credit card interest rates don't perfectly track inflation, though. Over the past several years, the rates on this type of borrowing tool have risen more than inflation. And when inflation falls, credit card rates tend to fall slowly in comparison. The repercussions of high inflation have also negatively impacted credit card balances . "Unfortunately, as things get more expensive for consumers, they often turn to credit cards to bridge the gap between their income and other financial sources and the increased cost of living," says CFP and personal finance expert Bobbi Rebell. "In other words, inflation cuts into consumers' purchasing power, and they have to make up the difference somewhere," says Rebell. "As consumers become more dependent on credit cards to make ends meet, balances tend to move higher." Inflation has eased month over month , though, according to the latest reading. So is that going to help drive down credit card rates soon? Compare your top debt relief options and chat with an expert now . If inflation continues to fall, credit card interest rates may fall in 2025, experts say. They've already fallen from their peak, albeit just slightly, in the third quarter of 2024. As inflation falls, credit card companies may feel more comfortable lowering their rates. Changes made to the federal funds rate by the Federal Reserve could also impact rates in the future. While the Fed doesn't directly dictate credit card rates, it sets the federal funds rate, which trickles down to other types of interest rates. The Fed decided to keep the federal funds rate at its current level at its March 2025 meeting, however — which means that for now, credit card rates will likely stay steady. Many analysts still expect the Fed to lower interest rates later in the year, though. "The Federal Reserve still plans to cut rates by half a percent this year," says Barrington. "That suggests that there may be room for credit card rates to fall - if everything goes according to plan. However, in its most recent meeting, the Fed raised its forecast for inflation this year and lowered its forecast for economic growth," says Barrington. "Both those things could be bad for credit card rates." In other words, the short answer is that if credit card rates fall in 2025, it likely won't be a dramatic drop. The federal funds rate isn't the only factor that could impact credit card rates in 2025, either, Barrington says. Even if the Fed does lower the federal funds rate, credit card companies could keep interest rates high — or even raise interest rates — if consumers continue to struggle and the risk to card issuers remains elevated. "Rising inflation tends to push interest rates higher, but another important influence on credit card rates is credit risk," says Barrington. "When an increasing number of credit card customers fail to pay their bills, credit card companies are likely to raise rates to cover the cost." Many borrowers have found themselves going into credit card debt to keep up with rising expenses over the past couple of years. "Most borrowers open a credit card in order to earn rewards, build credit, or for convenience — usually with the intent of paying off in full every month," says Daniel Shore, a money expert with LendingClub. "But life happens, and those plans can get sidetracked. Borrowers who are using a credit card to cover basic living expenses like gas and groceries should have a hard look at their budget. With inflation elevated for the foreseeable future, it's simply too easy to accumulate credit card debt that quickly snowballs." If you've been relying on a credit card to meet your financial obligations, careful budgeting is the most important first step. The simple (but also difficult) answer is that avoiding going into debt for your living expenses requires either increasing your income or decreasing your expenses. If you already have credit card debt, consider either using a 0% balance transfer credit card to lower the interest temporarily or consolidating your debt with a low-interest personal loan, a home equity loan or a home equity line of credit (HELOC) . Finally, when it comes to large unplanned expenses, consider cheaper alternatives to credit cards. "For those who face an unexpected expense — such as a repair or medical bill — it's important to know that there are options beyond a credit card," says Shore. "One option is a personal loan from an online lender that offers fixed interest rates lower than credit card APRs. These lenders also typically provide structured repayment with clear end dates." Inflation has driven credit card interest rates up over the past several years. That combination of high inflation and high interest rates has put a strain on many people's budgets. While credit card interest rates may fall in 2025, they're unlikely to change dramatically. Instead of holding out hope for lower interest rates, consumers are better off managing their budgets and looking for cost-effective borrowing alternatives.
Yahoo
19-03-2025
- Business
- Yahoo
Credit Sesame Wins "Best Personal Finance App" at the 2025 FinTech Breakthrough Awards
SAN FRANCISCO, March 19, 2025 /PRNewswire/ -- Credit Sesame, a leading financial wellness platform, has been named the "Best Personal Finance App" at the 2025 FinTech Breakthrough Awards, an annual program recognizing the most innovative companies, products, and services in the global financial technology industry. Credit Sesame's selection as a winner underscores its groundbreaking work in credit-building solutions, AI-powered insights, and financial wellness tools that empower consumers to take control of their credit and overall financial health. "We are honored to be recognized as the Best Personal Finance App by FinTech Breakthrough," said Adrian Nazari, Founder and CEO of Credit Sesame. "Our platform continues to push the boundaries of AI and fintech innovation, ensuring our users have access to personalized, actionable strategies to improve their financial health." Now in its ninth year, the FinTech Breakthrough Awards received over 4,500 nominations from top fintech companies worldwide. As a 2025 FinTech Breakthrough Award winner, Credit Sesame joins an elite list of industry leaders, including Mastercard, Citi, Experian, Capital One, and more. Credit Sesame's innovative platform's interface, Sesame RingTM, revolutionizes how users view and interact with their credit – all for free. Powered by AI, the interface makes it easier for users to see their credit in context, take control of their credit, make informed decisions, and follow an interactive game plan to stay on track. Sesame Ring provides a dynamic and visually organized view of important credit factors that make up the Sesame GradeTM and personalized action plans, helping them understand their overall credit health and how to reach their goals. Sesame AI leverages Credit Sesame's deep understanding of the credit models, market, credit providers, and its users. The AI models, trained on years of data and over 1.7 billion new daily data points, generate over 5.4 billion recommendations per month that encompass score simulations, user actions, likelihood of approval, and rankings of choices and options, equipping customers with insights and tailored action plans. Building on its success with consumer products, Credit Sesame recently launched "Sesame for Businesses" to bring its award-winning credit and financial insights platform to partners. Since its founding in 2010, Credit Sesame has helped millions of consumers build credit with their everyday habits, improve their credit scores, increase approval odds, lower their cost of credit, and save money. Through its direct-to-consumer offerings and new B2B platform, Credit Sesame is accelerating financial wellness at scale across the country. About Credit SesameCredit Sesame is a leading financial wellness company dedicated to helping consumers achieve better credit and financial health through cutting-edge technology and data-driven solutions. With a decade of credit expertise and a proven track record of serving over 18 million users, Credit Sesame leverages AI and advanced analytics to empower individuals to improve their credit scores, enhance approval odds, and reduce credit costs. The recently launched Sesame Credit Intelligence Platform extends this mission by providing institutions with a turnkey AI-powered credit intelligence solution. It enables businesses to offer personalized credit and financial wellness experiences, driving deeper customer engagement and growth. Backed by leading institutional and strategic investors, Credit Sesame operates across the U.S. For more information, visit Contact:Kate Laursen2036105879392159@ View original content to download multimedia: SOURCE Credit Sesame Sign in to access your portfolio
