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CNBC
3 days ago
- Business
- CNBC
3 key money moves to consider while the Fed keeps interest rates higher
In minutes released this week from the Federal Reserve May meeting, central bank policymakers indicated that an interest rate cut isn't coming anytime soon. Largely because of mixed economic signals and the United States' changing tariff agenda, officials noted that they will wait until there's more clarity about fiscal and trade policy before they will consider lowering rates again. In prepared remarks earlier this month, Fed Chair Jerome Powell also said that the federal funds rate is likely to stay higher as the economy changes and policy is in flux. The Fed's benchmark sets what banks charge each other for overnight lending, but also has a domino effect on almost all of the borrowing and savings rates Americans see every day. Since December 2024, the federal funds rate has been in a target range between 4.25%-4.5%. Futures market pricing is implying virtually no chance of an interest rate cut at next month's meeting, and less than a 25% chance of a cut in July, according to the CME Group's FedWatch gauge. It is more likely the Federal Open Market Committee won't lower its benchmark rate until the Fed's September meeting. With a rate cut on the backburner for now, consumers struggling under the weight of high prices and high borrowing costs aren't getting much relief, experts say. "You don't have to wait for the Fed to ride to the rescue," said Matt Schulz, chief credit analyst at LendingTree. "You can have a far, far greater impact on your interest rates than any Fed rate cut ever will, but only if you take action." Here are three ways to do just that: With a rate cut likely postponed until September, the average credit card annual percentage rate is hovering just over 20%, according to Bankrate — not far from last year′s all-time high. In 2024, banks raised credit card interest rates to record levels, and some issuers said they'll keep those higher rates in place. "When interest rates are high, credit card debt becomes the most expensive mistake you can make," said Howard Dvorkin, a certified public accountant and the chairman of Rather than wait for a rate cut that may be months away, borrowers could switch now to a zero-interest balance transfer credit card or consolidate and pay off high-interest credit cards with a lower-rate personal loan, said LendingTree's Schulz. "Lowering your interest rates with a 0% balance transfer credit card, a low-interest personal loan or even a call to your lender can be an absolute game-changer," he said. "It can dramatically reduce the amount of interest you pay and the time it takes to pay off the loan." Start by targeting your highest-interest credit cards first, Dvorkin advised. That tactic can create an added boost, he said: "Even small extra payments can save you hundreds in interest over time." Rates on online savings accounts, money market accounts and certificates of deposit will all go down once the Fed eventually lowers rates. So experts say this is an opportunity to lock in better returns before the central bank trims its benchmark, particularly with a high-yield savings account. "The best rates now are around 4.5% — while that's down about a percentage point from last year, it's still better than we've seen over most of the past 15 years," said Ted Rossman, senior industry analyst at "It's well above the rate of inflation and this is for your safe, sleep-at-night kind of money." Here's a look at other stories impacting the financial advisor business. A typical saver with about $10,000 in a checking or savings account could earn an additional $450 a year by moving that money into a high-yield account that earns an interest rate of 4.5% or more, according to Rossman. Meanwhile, the savings account rates at some of the largest retail banks are currently 0.42%, on average. "If you're still using a traditional savings account from a giant megabank, you're likely leaving money on the table, and that's the last thing anyone needs today," said Schulz. Those with better credit could already qualify for a lower interest rate. In general, the higher your credit score, the better off you are when it comes to access and rates for a loan. Alternatively, lower credit scores often lead to higher interest rates for new loans and overall lower credit access. However, credit scores are trending down, recent reports show. The national average credit score dropped to 715 from 717 a year earlier, according to FICO, developer of one of the scores most widely used by lenders. FICO scores range between 300 and 850. Amid high interest rates and rising debt loads, the share of consumers who fell behind on their payments jumped over the past year, FICO found. The resumption of federal student loan delinquency reporting on consumers' credit was also a significant contributing factor, the report said. VantageScore also reported a drop in average scores starting in February as early- and late-stage credit delinquencies rose sharply, driven by the resumption of student loan reporting. Some of the best ways to improve your credit score come down to paying your bills on time every month and keeping your utilization rate — or the ratio of debt to total credit — below 30% to limit the effect that high balances can have, according to Tommy Lee, senior director of scores and predictive analytics at FICO. In fact, increasing your credit score to very good (740 to 799) from fair (580 to 669) could save you more than $39,000 over the lifetime of your balances, a separate analysis by LendingTree found. The largest impact comes from lower mortgage costs, followed by preferred rates on credit cards, auto loans and personal loans.
Yahoo
5 days ago
- Business
- Yahoo
Mental Health and Your Credit Cards: A "Sad" and "Hopeless" Situation
A survey finds that big balances and steep interest rates are costing Americans much more than money. FORT LAUDERDALE, Fla., May 29, 2025 /PRNewswire/ -- annual Mental Health & Money Survey reveals dramatic increases in negative emotions and behaviors from 2022 to 2025, despite inflation being significantly lower today (2.3%) compared to three years ago (6.5%). The primary culprit appears to be credit card debt. When asked how credit card debt affects their social life, just over 10% of respondents in 2020 said, "I avoid going out with friends or family." This year, that number more than doubled to over 23%. The impact extends to dating as well. In 2022, only 5% reported avoiding dating due to credit card debt. Today, that figure has climbed to over 13%. "Inflation might have dropped, but the damage is done," said Howard Dvorkin, CPA, chairman of "Credit cards are the most widespread form of debt, which means they leave the deepest scars. You can't always see them, but they can linger for years and affect millions of Americans." Survey results from 1,000 Americans further support Dvorkin's concerns, revealing troubling trends in emotional well-being tied to financial stress. When asked how they feel while reviewing their credit card bills and what emotional triggers prompt them to spend, the responses revealed concerning trends. Emotional Distress Linked to Debt Has Surged Since 2022 In 2022, only 6% reported feeling hopeless — by 2025, that number jumped to nearly 22% Feelings of sadness rose from almost 7% in 2022 to 22% in 2025 Reports of losing sleep over debt more than quadrupled, from just over 2.5% to 13% Majority Link Credit Card Use to Emotional Stress and Anxiety 71% of respondents say the convenience of credit cards negatively impacts their mental health 43% feel stressed after using their cards Nearly 40% avoid reviewing their monthly statements due to anxiety 25% admitted to applying for a credit card while already feeling sad or stressed Credit card debt isn't the only financially motivated mental health issue. This year's survey also asked about lingering inflation and student loan debt. Inflation Stress Spills into the Workplace and Daily Life 74% report feeling anxious 23% say it affects their focus at work 7% report being unable to eat The Weight of Student Loan Default: Fear, Action, and High Balances 88% of borrowers with defaulted student loans worry about wage garnishment or loss of tax refunds 68% have taken proactive steps like enrolling in repayment programs or setting aside money monthly Nearly 1 in 4 borrowers owe more than $50,000 "Our mental health is deeply connected to our financial health," Dvorkin added. "The more we talk about this and give people resources to manage their debt, the more we reduce the emotional burden of money stress." View original content to download multimedia: SOURCE Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CBS News
13-05-2025
- Business
- CBS News
These are the most effective debt relief strategies to use right now, experts say
We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. There are a few debt relief strategies that could be the financial life preserver you're looking for now, experts say. Getty Images Economic factors, like inflation and potential tariffs, have put financial pressure on Americans, forcing many to turn to credit cards for help. Credit card balances are now at record highs, and with average credit card interest rates nearing 22%, that debt comes with costly consequences. As a result, this type of debt can be overwhelming, to say the least, and even making the minimum monthly payments can leave you stuck in a pricey cycle of debt for years to come. Fortunately, there are debt relief tools that can help. "If there's any silver lining to this economic rollercoaster ride, it's the renewed focus on debt solutions companies. When the economy is roaring, these powerful services tend to get ignored. Now Americans are rediscovering their value," Howard Dvorkin, chairman of says. But not all debt relief options are created equal. If you want to make sure you tackle your debts in the most effective way possible, it's important to know which debt relief strategies make the most sense in today's unique economic climate. Find out how to get help with your high-rate debt today. The most effective debt relief strategies to use now, experts say These are the best routes to explore right now, according to the pros: Debt consolidation Financial pros say that debt consolidation is likely your best option these days, as long as you choose the consolidation product carefully. "With debt consolidation, you consolidate all of your loans into one loan, preferably with a lower interest rate," says Laura Sterling, vice president of marketing at Georgia's Own Credit Union. "Rather than pay multiple loans, you focus on paying one loan, saving money on interest, and streamlining the repayment process." Some lenders offer designated debt consolidation loans you can use for this purpose or, if you're a homeowner, you can use a home equity loan or home equity line of credit (HELOC). HELOCs are one of the best options right now, according to Patti Brennan, president and CEO of Key Financial, as the "interest rates are much lower than credit cards," she says. The average HELOC rate right now is just below 8%. Keep in mind that a new loan will require an application and credit check, so these aren't the best options if you have bad credit. "These can be a good fit if the consumer's credit is fair-to-good, and if they can qualify for decent loan terms," says Natalia Brown, chief compliance officer at National Debt Relief. "The only downside is that it might require collateral and could stretch out the repayment timeline." Explore your debt relief options and start tackling your debt problems today. Balance transfer cards Another option is a balance transfer card. Similar to debt consolidation loans, this strategy involves taking out a new card, paying off your debts and rolling it all into one balance. The new card would ideally be one with a 0% or very low promotional interest rate, allowing you to save money on interest and pay off your debts faster. "If the customer has good credit and can pay off the debt quickly, a balance transfer credit card might help," Brown says. "The catch is that it needs to be paid off before the introductory period ends, or you'll be left dealing with high interest and fees." Debt management plan Debt management plans are another effective option these days. This involves handing your debts over to a debt relief professional or a credit counselor. They will then negotiate with your creditors to try and lower interest rates and fees and come up with a plan for repaying your debts over a specific time period. You'll pay them a monthly fee for this service. "A debt management plan can help the customer stay organized and on track with monthly payments," Brown says. "However, it doesn't actually reduce the total amount owed and usually takes about four to five years to complete." Note, though, that debt management plans typically require you to close out any open credit lines. This ensures you don't rack up more debt while paying down your existing balances. Debt settlement Another option you might explore right now is debt forgiveness, also known as debt settlement. This requires negotiating with your creditors to pay them less than you owe to close out the debt. "Debt settlement is one of the most effective solutions for individuals with $7,500 or more in unsecured debt — such as credit card balances, medical bills, or personal loans," Brown says. The big downside is that debt settlement requires you to stop making payments while your debts are being negotiated. This can put a big dent in your credit score and hurt your financial options moving forward. You should make sure to consider the costs, too. "They charge a high fee for this service," Sterling says. "You will also likely pay taxes on any debt that is forgiven." The bottom line At the end of the day, good financial planning is key if you want to get out of debt. "Create a budget and track your expenses," says Doug Roller, investment advisor representative and owner of Crossroads Financial Group. "You can also call your creditors and see if they can do anything to help you not fall behind on your payments." There are also debt payoff methods you can try, like the avalanche or snowball. With the former, you focus on paying off your highest-interest debt first, making minimum payments on the rest. Once that's paid off, move on to your next highest-interest debt. The snowball method is similar, only it focuses on the smaller-balance debts first. "This method makes the minimum payments to larger debts and puts more money towards the small debt to pay that off faster," Roller says.
Associated Press
28-04-2025
- Health
- Associated Press
Debt.com Survey: 91% of Americans with Medical Debt Say It Shouldn't Hurt Credit Scores - But Political Attacks on CFPB Put New Protections at Risk
FORT LAUDERDALE, Fla., April 28, 2025 /PRNewswire/ -- A new national survey from finds 9 in 10 Americans with medical debt believe it should not appear on credit reports, just months after the Consumer Financial Protection Bureau ( CFPB ) finalized a rule to remove it. But the agency and its rule are under threat, as some lawmakers push to dismantle both. According to the poll of 682 U.S. adults, the vast majority support the CFPB's move, with 91% of those with medical debt agreeing that it should be excluded from credit reports. More than half say medical bills have already damaged their credit, in some cases dropping scores by more than 100 points. 'Medical debt is often unavoidable and doesn't reflect financial responsibility,' say 30% of respondents. Another 10% agreed that the system is too complex and inaccurate to be used in credit scoring. Howard Dvorkin, CPA and Chairman of agrees, 'We don't penalize people for getting sick, but that's exactly what happens when medical debt lowers their credit score. This isn't about dodging responsibility—it's about recognizing that health emergencies shouldn't derail someone's entire financial future.' The survey paints a troubling picture of how deeply medical debt is woven into American lives: Among those with damaged credit: 'Medical debt doesn't just show up on a credit report—it shows up in everyday life,' says Don Silvesti, President of 'It drains savings, delays goals, and forces people to make impossible choices between their health and their finances.' To pay for medical debt, survey respondents took a hit to their financial stability: As inflation continues, 86% say it's become harder to pay off medical debt. The consequences are not only financial but deeply personal with 57% saying debt is delaying major life goals like higher education, marriage, homeownership, or starting a family. Millennials are the most affected, with 62% reporting that medical debt is holding them back. data suggests Americans overwhelmingly oppose the idea of the CFPB medical debt protections ending—and want solutions that reflect financial reality, not punishment for medical emergencies. About is a leading resource for personal finance education and debt solutions. In partnership with certified credit counselors and financial professionals, helps individuals navigate challenges related to credit, budgeting, student loans, and more. View original content to download multimedia: SOURCE
Yahoo
31-03-2025
- Business
- Yahoo
Debt.com's 2025 Survey Exposes Disturbing Trends in Credit Card Debt as Inflation Continues to Pressure Americans' Finances
With one-third of respondents relying on credit cards to cover basic expenses - many having maxed out their limits FORT LAUDERDALE, FL / / March 31, 2025 / As policymakers push forward with efforts to cap steep credit card interest rates, the latest Credit Card Survey from sheds light on how inflation has significantly impacted the financial stability of Americans - and how many are still struggling to dig their way out of debt. For the second year in a row, one in three Americans say they rely on credit cards to make ends meet, with a growing number already maxed out. The national poll of 1,000 adults illustrates how rising costs have shifted credit cards from being a tool of convenience to a lifeline for survival. "Even if headlines suggest inflation is cooling, everyday Americans are still feeling its full weight at home," says Howard Dvorkin, CPA and Chairman of "Our findings show that many are forced to lean on high-interest credit cards just to get by - yet most haven't taken steps to explore solutions that could help them regain control." Key Findings from 2025 Credit Card Survey 32% of Americans have maxed out their credit cards 37% use credit cards regularly just to make ends meet 44% say inflation has caused them to carry a larger monthly balance Of those maxed out, 80% would rely on credit cards during a financial emergency, and 23% owe more than $20,000 in credit card debt This financial strain is reflected across generations, with Millennials (42%) and Gen Xers (39%) maxing out their cards at higher rates than Gen Z (32%) or Baby Boomers (14%). Notably, over 63% of all respondents carry a credit card balance, and more than 1 in 5 owe over $10,000-a stark indicator of the mounting debt crisis. Credit Card Interest Rates Under Fire findings emerge as Senators Alexandria Ocasio-Cortez (D-NY) and Anna Paulina Luna (R-FL) introduce a bipartisan bill to cap credit card interest rates at 10%, a move aimed at helping working people in endless cycles of debt. "We are seeing interest rates above 24%, and 27% of survey respondents don't even know their APR," says Dvorkin. "This lack of awareness paired with record-high balances is financially dangerous. The proposed cap could offer real relief to millions, but education and action are key." Economic Backdrop: Consumer Sentiment Slips This news comes amid fresh data from the University of Michigan's Consumer Sentiment Index, showing a dip in consumer confidence. Economic uncertainty, persistent inflation, and high borrowing costs have left many Americans cautious about spending - and anxious about their financial futures. Awareness of Debt Solutions Remains Low Despite the growing burden, 57% of respondents have never considered professional or DIY debt relief options, such as credit counseling, balance transfers, or debt consolidation. This highlights a critical gap in financial education and underscores the importance of proactive outreach. Full Survey Data Available Upon Request comprehensive report includes generational breakdowns, insights into how Americans are introduced to credit, and how financial emergencies drive credit card reliance. Contact Details RandolphJRandolph@ Company Website SOURCE: View the original press release on ACCESS Newswire
