Latest news with #DebtManagement
Forbes
4 days ago
- Business
- Forbes
American Debt Reaches All-Time High: How A Shark Tank Investor Would Tackle Rocky Finances
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations. Consumer debt is on the rise, with mortgage balances, student loans, auto loans and credit card balances up across the board. But 'Shark Tank' investor Kevin O'Leary is coming in hot with concrete advice to stifle debt growth, dishing out tips on how to pay down your loans efficiently and build a financial nest egg. American debt is at an all-time high. The Federal Reserve Bank of New York released its Q2 2025 debt report , showing total household debt at a record $18.39 trillion, up from Q1's previous high of $18.2 trillion. In all spending sectors, consumers are struggling to keep up. Mortgage balances grew by $131 billion during Q2 2025, totaling $12.94 trillion at the end of June. Home equity lines of credit (HELOC) balances also rose by $9 billion, marking the thirteenth consecutive quarterly increase. Credit card balances rose steadily, climbing 5.87% year-over-year. They increased by $27 billion in just Q2 to a total of $1.21 trillion. Consumers are also falling behind on their student and car loans. Auto loan balances rose by $13 billion and now stand at $1.66 trillion in total. Student loan balances inched up by $7 billion, now totaling $1.64 trillion. With the rise in the cost of living, Americans' debt on nonhousing expenses rose by $45 billion, a remarkable 0.9% increase just months after Q1 2025. 'Shark Tank' investor Kevin O'Leary addresses credit card debt in his book 'Cold Hard Truth on Men, Women and Money,' dubbing it a financial 'cancer.' 'Spending too much is a disease,' he writes, and he recommends his '90-Day Number' approach to tackle debt. The concept of the 90-Day Number is simple: Consumers monitor their expenses for three months and compare them to the income they bring in over the same period. A negative number prompts the consumer to deeply scrutinize their budget and cut back on spending to give themselves breathing room. The goal is to come out with a positive number and excess income at the end to use toward paying down debt. Though the idea sounds simple, O'Leary explains that it's a tried and true method that works so well he's invested thousands a month to keep track of his personal and corporate accounts. 'I will never allow a lack of diligence to affect any of my business holdings, which is why I'm offering you this advice about knowing your numbers,' O'Leary writes. 'And this applies as much to a business as it does to your personal finances. Ignorance costs you money, and it's totally avoidable.' Intro Offer: Earn a $200 Bonus after you spend $500 on purchases in your first 3 months from account opening Credit Score ranges are based on FICO® credit scoring. This is just one scoring method and a credit card issuer may use another method when considering your application. These are provided as guidelines only and approval is not guaranteed. Believe it or not, the right credit card can be a tool in paying down credit card debt. Getting your hands on a 0% promotional APR credit card when you're carrying high-interest debt provides you with a runway for avoiding future interest charges. With a balance transfer , you can transfer multiple credit balances to one card, as long as the total debt fits within the card's limit. Most balance transfer fees range from 3% to 5%, but this can be a small price compared to the interest charges exceeding 20% you'll be avoiding. Depending on the promotional period, you'll usually have a year or longer to pay down your debt without incurring additional interest. Read more: How To Consolidate Credit Card Debt The Wells Fargo Reflect® Card is one of the most valuable cards on the market for debt consolidation. It offers a 0% intro APR for 21 months from account opening on purchases and qualifying balance transfers. A 17.24%, 23.74%, or 28.99% variable APR applies thereafter. Balance transfers made within 120 days qualify for the intro APR and a balance transfer fee of 5%, min $5 applies. Another solid option is the Citi Simplicity® Card , which offers a 0% intro APR on balance transfers for 21 months and on purchases for 12 months from date of account opening. After that, the variable APR will be 18.24% to 28.99%. There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. After that, a fee of 5% of each transfer (minimum $5) applies. While neither of these cards offers rewards or welcome bonuses, they are designed as tools for consumers to tackle mountains of debt rather than accumulate new charges and rewards. Personal loans are also an option to finance your debt, and you can acquire one from a bank, credit union or online lender. Loans come in a variety of term lengths, usually ranging from 12 to 60 months, and offer fixed monthly payments, as opposed to the open construct, pay-it-down-as-quickly-as-possible structure of a 0% APR credit card. As with credit cards, however, the interest rate you'll receive on a personal loan depends on your credit score and profile, which can fluctuate based on your total debt. Bill Shafransky, a certified financial planner and senior wealth advisor at Moneco Advisors, encourages consumers to focus on paying off debt that incurs the highest interest rates first. 'If it's a low interest rate, I'm not overly concerned or advising clients to get too aggressive with prepaying the low interest-bearing notes, but if they have some higher interest-bearing notes, that debt consolidation could be a very good tool,' Shafransky says. For consumers with low credit scores who can't qualify for a loan or a 0% APR credit card, Shafransky advises weaning money off retirement planning for now and remaining focused on getting their debt balances to zero. With time, their credit scores will rise. Paying off your consumer debt is a critical first step to ensure financial security down the line. Preparation is key, and having transparency on your spending habits will make it clear what needs to change. If you qualify, consider applying for a 0% APR credit card or a personal loan to save yourself money and time in the process.
Forbes
31-07-2025
- Business
- Forbes
Trump Administration Debt Strategy Is More Confusion And Uncertainty
President Donald Trump and Treasury Secretary Scott Bessent appear to be pushing a new approach to Treasury bond sales. However, what is supposed to be new seems similar to what was done by Janet Yellen during the Biden administration: pushing short-term bonds over long-term ones. As the Wall Street Journal reported, the administration said it would delay issuance of longer-term bonds until yields fell. The likely rationale is secondary budget control of debt expenses. Annual debt service for the U.S. is currently more expensive than any discretionary budget category, including defense spending. 'What I'm going to do is I'm going to go very short-term,' Trump had said in June, according to the Journal. 'Wait until this guy [Fed Chair Jerome Powell] gets out, get the rates way down, and then go long-term.' The federal budget deficit is approximately $2 trillion annually. To support the deficit spending, the government must sell enough debt to cover it. The debt varies in length from far less than a month to 30-year bonds. The Treasury uses different mixes of securities to maintain the balance. Shorter-term Treasurys shorten the interest payment obligations and is usually cheaper, at least when the yield curve isn't inverted and longer-term bonds have higher yields. But shorter-term also means space for volatility and a jump in costs if inflation increases. Longer-term Treasurys allow the government to space out the debt obligations and lock in rates, but the costs are higher. The mix typically is set and relatively consistent, so investors know what to expect. The Trump administration plans to announce on Wednesday, July 29, the mix of lengths. 'It is disingenuous to suggest this Administration is deviating from longstanding debt management practices when Treasury's auction sizes and market guidance have not changed since the last Administration,' Deputy Treasury Secretary Michael Faulkender said in a written statement, the Journal noted. But whether a Trump or Biden administration, the strategy has become to pull back from higher levels of long-term bond sales. Bessent, a former hedge fund manager, was a regular critic of the former administration and its Treasury Secretary Yellen for holding down sales of longer-maturity Treasurys, which affect longer-term rates for house mortgages and commercial borrowing, as Bloomberg reported in February 2025. Currently, the combination of concern about inflation, tariff uncertainty, levels of national debt, and questions about the independence of the Feb are pushing investors to demand higher yields on the 10-year. Bessent has said that the administration wants to push down yields on longer-term Treasury debt. So far, strategies haven't delivered. That potentially increases the amount of uncertainty the country's economy has been facing. Announcement of tariff deals would seem to help reverse the trend of confusion, but they only appear to mask it. Jorge Liboreiro, a reporter at Euronews, posted an analysis on the White House's fact-sheet about the US-EU trade deal that, as he notes, 'with claims that directly contradict the European Commission's version of events.' One example is that the White House touts a $600 billion U.S. investment 'pledge' that the EU clarifies as an 'intention,' not pledge. There is no deal on EU purchase of U.S. military equipment. There was no concession on food safety and sanitary certificates for U.S. pork and dairy products. Such redefinitions are more examples of sweeping problems under the rug. Even if portions of the public are reassured, investors and institutions with fiscal muscle that can affect the economy are likely not.
Reuters
25-06-2025
- Business
- Reuters
China's collateral demands curbing emerging countries' ability to manage finances, study shows
NAIROBI, June 26 (Reuters) - China's practice of securing its loans to low-income nations through commodity revenue streams and cash held in restricted escrow accounts is curbing their ability to manage their finances effectively, a study published on Thursday showed. China has lent hundreds of billions of dollars for infrastructure and projects in developing countries, but has been criticised for using earnings of commodity exports from borrower nations as security for the loans, sometimes arranged during times of economic strife for the borrower. China's government has repeatedly denied that its lending practices towards poorer countries are unscrupulous. China's total public and publicly guaranteed lending to low and middle-income countries totals $911 billion, said the report by AidData, the Kiel Institute for the World Economy and Georgetown University, together with other partners. Of that, nearly half - or $418 billion across 57 countries - is secured with cash deposits in Chinese bank accounts, it said. "As security, Chinese lenders strongly prefer liquid assets - in particular, cash deposits in bank accounts located in China. They also want visibility and control over revenue," said Christoph Trebesch of the Kiel Institute. The deposits in accounts located in China and controlled by the lending entities can average more than a fifth of the annual payments low-income commodity-exporting countries make to service their external debt, the research found. "Some of these revenues remain offshore beyond the control of the borrowing government for many years," the report said, adding the lack of access or transparency compromises debtor governments' ability to monitor and steer their fiscal affairs. China applies the practice to its lending to borrowers in Africa, Asia, Latin America and the Middle East, the study, which covered 2000-2021, found. "Our research reveals a previously undocumented pattern of revenue ring-fencing where a significant share of commodity export receipts never reach the exporting countries," said Brad Parks, executive director of the AidData research lab. The International Monetary Fund and the World Bank have in the past raised concerns, opens new tab about the impact of collateralised lending to developing countries. The practice has the potential to cause debt distress to the borrowers, the two institutions said in a joint paper published in 2023, by constraining their fiscal space, increasing the risk of over-borrowing, and curbing the financing from unsecured creditors available to them. In cases where countries have had to restructure their external debts due to distress, China's practice of securing infrastructure loans using unrelated commodity revenue flows has complicated the restructuring, the report said.
Yahoo
25-06-2025
- Business
- Yahoo
China's collateral demands curbing emerging countries' ability to manage finances, study shows
By Duncan Miriri NAIROBI (Reuters) -China's practice of securing its loans to low-income nations through commodity revenue streams and cash held in restricted escrow accounts is curbing their ability to manage their finances effectively, a study published on Thursday showed. China has lent hundreds of billions of dollars for infrastructure and projects in developing countries, but has been criticised for using earnings of commodity exports from borrower nations as security for the loans, sometimes arranged during times of economic strife for the borrower. China's government has repeatedly denied that its lending practices towards poorer countries are unscrupulous. China's total public and publicly guaranteed lending to low and middle-income countries totals $911 billion, said the report by AidData, the Kiel Institute for the World Economy and Georgetown University, together with other partners. Of that, nearly half - or $418 billion across 57 countries - is secured with cash deposits in Chinese bank accounts, it said. "As security, Chinese lenders strongly prefer liquid assets - in particular, cash deposits in bank accounts located in China. They also want visibility and control over revenue," said Christoph Trebesch of the Kiel Institute. The deposits in accounts located in China and controlled by the lending entities can average more than a fifth of the annual payments low-income commodity-exporting countries make to service their external debt, the research found. "Some of these revenues remain offshore beyond the control of the borrowing government for many years," the report said, adding the lack of access or transparency compromises debtor governments' ability to monitor and steer their fiscal affairs. China applies the practice to its lending to borrowers in Africa, Asia, Latin America and the Middle East, the study, which covered 2000-2021, found. "Our research reveals a previously undocumented pattern of revenue ring-fencing where a significant share of commodity export receipts never reach the exporting countries," said Brad Parks, executive director of the AidData research lab. The International Monetary Fund and the World Bank have in the past raised concerns about the impact of collateralised lending to developing countries. The practice has the potential to cause debt distress to the borrowers, the two institutions said in a joint paper published in 2023, by constraining their fiscal space, increasing the risk of over-borrowing, and curbing the financing from unsecured creditors available to them. In cases where countries have had to restructure their external debts due to distress, China's practice of securing infrastructure loans using unrelated commodity revenue flows has complicated the restructuring, the report said. 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
Finextra
17-06-2025
- Business
- Finextra
First Abu Dhabi Bank deploys iGCBdebt management tech
Intellect Global Consumer Banking (iGCB), a business unit of Intellect Design Arena Limited, announced that First Abu Dhabi Bank (FAB), the UAE's global bank, has successfully implemented Intellect Consumer Banking's Debt Management solution offered as a part of Lending. 0 This content is provided by an external author without editing by Finextra. It expresses the views and opinions of the author. The initiative marks a pivotal step in FAB's credit strategy to enhance operational efficiency and customer experience by transitioning to a comprehensive and automated digital process. The integration of debt management automates various processes and links over ten subsystems within FAB, allowing for real-time data visibility of the credit portfolio. This enhancement is aligned with the bank's forward-looking vision to fully automate its debt collection features over the next five years, reinforcing its customer-first approach and ambition to grow stronger by investing in technology and people. Post the implementation of Lending, the bank will be able to: – Create collection strategies in Lending application through equal distribution, percentage allocation and bucket based queue stamping – Efficiently manage collections across loan and card variants through the Lending application – Streamline the collection process and reduce the cost of recovery – Efficiently partner with loan recovery agencies to improve collection by getting complete visibility of the information and actions taking place with agencies working on debt First Abu Dhabi Bank is embarking on a transformative journey with Intellect, by implementing Intellect's Lending, thereby marking a significant step in the bank's digital roadmap. This collaboration reflects FAB's commitment to providing the most efficient, customer-centric banking experience across its expanding global network, building upon a technology partnership with Intellect that began in 2005. Rajesh Saxena, CEO, Intellect Global Consumer Banking, said, 'At Intellect consumer banking, we are honoured to collaborate with First Abu Dhabi Bank (FAB) on this crucial initiative, reinforcing a shared commitment to innovation and digital transformation. FAB's decision to implement Digital Lending, following their investment in our core banking and digital engagement platform, highlights the strength of this partnership and FAB's confidence in our advanced solutions. We remain dedicated to empowering our partners, including FAB, on their digital transformation journey, equipping them with innovative solutions that cater to the evolving demands of their customers.'
