Latest news with #TomoCredit
Yahoo
27-05-2025
- Business
- Yahoo
TomoCredit Unveils TomoIQ: AI-Powered Financial Wellness Platform to Build Smarter, Inclusive Financial Future for Everyone
SAN FRANCISCO, May 27, 2025 /PRNewswire/ -- TomoCredit, the leading personal financial wellness platform, is proud to announce the launch of TomoIQ, a groundbreaking AI-powered financial assistant built to make smart, professional-level financial guidance accessible to everyone, regardless of income, background, or credit history. TomoIQ is designed to be more than just a tool—it's a judgment-free companion for individuals navigating the complexities of their financial journey. Whether someone is deep in debt, working to improve their credit score, or saving for their first home, TomoIQ offers personalized, real-time support with empathy, intelligence, and zero shame. "Access to financial knowledge shouldn't be reserved for the wealthy or those who already 'have it together,'" said Kristy Kim, CEO and founder of TomoCredit. "We built TomoIQ to level the playing field—because everyone deserves a chance to make informed financial decisions, no matter where they're starting from." According to Tomo's recent consumer survey, over 80% of customers report feeling "more comfortable" using AI for financial guidance than working with traditional human financial advisors. This significant preference highlights a growing trust in digital tools and the value customers place on accessibility, objectivity, and speed AI offers in financial decision-making. TomoIQ provides guidance on budgeting, debt management, savings strategies, credit building, and more. Unlike generic chatbots or static advice articles, TomoIQ delivers conversational, contextual insights tailored to each user's unique situation, with no judgment and no assumptions. Key features of TomoIQ include: Personalized financial guidance based on real-life questions and scenarios 24/7 access to information on credit, debt, saving, and budgeting Real-Time Financial Health Scoring using alternative data sources. Inclusive design built to serve underserved communities, including thin-file and no-file users Confidential and empathetic tone, ensuring users feel supported, not shamed "TomoIQ isn't just here to help—it's here to make professional financial insight accessible to everyone, not just the top 1%." Kim added. "Whether you're making your first budget or rebuilding after a financial setback, TomoIQ is in your corner, providing guidance that's smart, supportive, and truly accessible." About TomoCredit:TomoCredit is a mission-driven financial technology company committed to helping individuals, especially those excluded from traditional credit systems, build strong financial futures. With a user base of over 4 million, TomoCredit offers tools, education, and now, AI-powered support through TomoIQ, to empower every person on their financial journey. Media Contact:Camilla Guo941-993-7222camilla@ View original content to download multimedia: SOURCE TomoCredit
CBS News
22-04-2025
- Business
- CBS News
Why credit card interest rates are so high now (and what to do about it)
The U.S. economy is showing mixed signals this spring. Inflation is easing and is currently at 2.4% year-over-year (as of the latest reading), but it's still sitting above the Federal Reserve's 2% target rate. And, while interest rate cuts appear possible this year, the rate environment remains elevated for now. Meanwhile, the stock market has been volatile over the last few months. Credit card debt has been climbing in tandem as people struggle under the weight of higher prices, expensive debt and other factors, and it's happening despite today's high average credit card rates. According to the latest data, the average cardholder is carrying nearly $8,000 in credit card debt at a time when the average card rate is closing in on 22% . But why are credit card interest rates so high right now? It has a lot to do with where the economy stands, how the Federal Reserve sets rates and the way credit card companies manage risk. Find out how to start tackling your credit card debt today . Here are a few of the factors that are keeping card rates elevated right now. Perhaps the biggest reason for high credit card rates is the Federal Reserve's benchmark rate — as credit card APRs tend to rise and fall alongside it, experts say. "When the Fed raises its benchmark rate, borrowing costs increase across the board, including for credit card issuers," says Kristy Kim, a personal finance expert and CEO of TomoCredit. "Since credit cards typically have variable rates tied to the prime rate, any increase by the Fed is quickly passed on to consumers." The federal funds rate soared in recent years as the Fed worked to curb inflation, and credit card rates increased accordingly. But more recently, inflation has slowly inched downward toward its 2% target. Despite inflation easing, credit card APRs have stayed near record highs. So why is that happening? Kim notes that the Fed implemented modest cuts in late 2024, but "they haven't implemented substantial reductions yet, meaning prime rates and therefore credit card APRs remain elevated." Credit card issuers are often slow to pass along lower rates, especially when the economy is uncertain. They'd rather keep wider profit margins in case more borrowers start missing payments. Get help with your expensive credit card debt now . High delinquency rates historically lead to higher credit card APRs because lenders raise rates to offset the risk of missed payments. And, delinquency rates are rising, meaning more cardholders are 30 days or more behind on their payments. The New York Federal Reserve reports that 7.18% of credit card debt became 90 days or more past due by the end of 2024, up from 6.36% a year earlier. That's a sign of how hard it's become to keep up with debt, with roughly 48% of American cardholders relying on their credit cards to cover basic living expenses . "When consumers fall behind on payments, lenders will likely raise interest rates or keep them elevated to compensate for the losses," says Leslie Tayne, financial attorney. "When combining potential delinquency rates and missed payments with today's elevated federal funds rates, it's unlikely that credit APRs will decrease anytime soon, even if the economy improves." Today's high credit card APRs are also attributable to the way lenders assess risk. "Another key contributor to today's high credit card rates is individual credit behavior, particularly high credit utilization ratios and missed payments," says Kim. "When consumers carry large balances relative to their credit limits or pay late, issuers view them as higher-risk borrowers and often assign higher interest rates as a result." Kim recommends keeping your credit utilization below 20% and always paying your bill on time. "These habits not only help maintain a healthy credit score, but also signal to lenders that you're a responsible borrower, which can lead to better rates over time," Kim adds. A large credit card balance can make it hard to stay on budget and lead to higher interest costs over time if you can't pay it down. Here are some practical steps you can take to start lowering your credit card debt: Credit card rates remain high for several reasons, led by a high Federal Reserve benchmark rate. Even though the Fed has signaled rate cuts this year, they may not be substantial enough to bring down APRs significantly. Instead of waiting for lower interest rates, you may be better off focusing on bringing down credit card debt and considering lower-cost ways to borrow.
CBS News
11-03-2025
- Business
- CBS News
3 signs your credit card debt is overwhelming you, according to experts
Credit card debt is impacting millions of Americans in 2025. Life happens fast, though, and there are times in which you may have no choice but to use credit cards to get by. An untimely layoff, medical emergency or sudden home repairs can force you to rely on your credit cards to cover expenses. Over time, these balances grow as interest charges compound, making even small debts feel impossible to overcome. Unfortunately, the warning signs of overwhelming credit card debt aren't always obvious, either. With credit card interest rates at record highs, what starts as manageable can quickly spiral out of control. Below, finance professionals and debt management experts share three major red flags to watch for, plus debt relief options to help you break free. Learn about your credit card debt relief options here. 3 signs your credit card debt is overwhelming you, according to experts You may have too much credit card debt if the following sounds familiar: You're only making minimum payments While occasional cash flow issues might force you to make one minimum payment here and there, a pattern hints at trouble. Christopher L. Stroup, certified financial planner and founder of Silicon Beach Financial, says he looks for three consecutive months of minimum payments before determining there's a serious problem. "With compounding interest lying in wait, cardholders may notice the hole they started digging for themselves is getting deeper faster than they might've thought possible," says Martin Lynch, president of the Financial Counseling Association of America. He warns that minimum payments can lead to negative amortization, where your balance increases despite making payments. Speak to a credit card debt relief expert about your options today. You're maxing out credit cards to cover the essentials "If you need to open a credit card or max out [existing ones] constantly just to live, it's a surefire sign that debt has become overwhelming," warns Kristy Kim, CEO and founder of TomoCredit. This pattern is especially dangerous during inflation, where costs rise but your income might not. It's tempting to use credit cards for everything to earn travel miles or cash back. But "chasing points with your credit cards only works if you pay [them] off in full each month," Stroup says. Remember, any rewards you earn become worthless when interest charges pile up. To break out of this cycle, track your spending for one month to see how much goes on credit. If necessities such as groceries and utilities push you beyond what you can pay off, Stroup recommends switching to debit. This creates a natural spending limit and makes the cost of daily living more visible. You're starting to miss payments What seems like simple forgetfulness can be a sign of deeper financial turmoil. Lynch explains that people with overwhelming debt often begin "juggling payments" — intentionally skipping one creditor to pay another they missed last month. This payment shuffle may indicate you no longer have enough money to cover all your obligations. These missed or late payments come with costly consequences. "You're accruing late fees … which only magnifies your interest burden," cautions Stroup. He recently discovered a client who had paid steep monthly late fees for years without realizing it. Avoid this fate by setting a calendar reminder to review your statements each month. You may find that simply changing your payment date eliminates these unnecessary charges. How to regain control of your finances If credit card debt is overwhelming you, experts encourage exploring five credit card debt relief options: Credit counseling: First, get professional guidance on managing debt and improving your financial situation. Many nonprofit organizations offer this service at no cost. Debt management plans (DMPs): Credit counseling agencies negotiate lower interest rates (often around 7% instead of 25%) and create a structured payment plan. These work best if you have a steady income but high interest rates. With a DMP, "[you'd] repay the amount [you] borrowed at low interest, which gives the household budget a break," says Lynch. Debt consolidation loans: Consolidating debt involves combining several credit card balances into one loan with a lower interest rate. Consider this route if you have strong credit and qualify for favorable terms. Debt settlement: Debt settlement companies negotiate with creditors to accept less than what you owe as full payment. This approach may be suitable if you're "facing financial hardship [and] can't afford minimum payments," says Kim. However, Lynch warns that a settlement can damage your FICO score by 75 to 125 points. You may also get tax bills for the forgiven debt. Bankruptcy: This provides a fresh start. But "it's a last resort [when you have] insurmountable debt and no viable repayment path," Kim says. Bankruptcy will severely affect your credit score for seven to 10 years after filing. The bottom line Credit card overspending is a cue to seek help before things worsen. "Face the numbers head-on and create a plan," advises Kim. A good first step is speaking with a nonprofit credit counseling agency. You'll get a non-judgmental consultation where a counselor reviews your credit report and budget. From there, they'll suggest the best debt relief strategies for your situation.
Yahoo
22-02-2025
- Business
- Yahoo
Here's How Much the Definition of Middle Class Changed Since Biden's First Day in 2021
The definition of America's middle class used to be a lot clearer than it is today — thanks to the changes of inflation and cost of living. According to data from Pew Research Center, the country's middle class has shrunk considerably over the past few decades. Back in 1971, approximately 61% of Americans were considered middle class; by 2023, that number had fallen to just 51%. But the data only shows the percentage of middle-class households remaining. What it doesn't indicate is what the middle-class lifestyle actually looks like today or how much you need to still make a comfortable living in the U.S. Explore More: Check Out: 'Since 2021, the definition of middle class in the U.S. hasn't changed that much on paper, but the reality of these changes feels much different for a lot of people,' said Kristy Kim, personal finance expert and CEO at TomoCredit. According to Pew Research Center, middle-class households are those who earn between two-thirds and double the U.S. median household income — adjusted for household size and region. Discover Next: The latest U.S. Census data found that the median household income in 2023 was $80,610. Using this figure and ignoring household size and region, you'd be considered 'middle class' if you earn between $53,740 and $161,220. The U.S. median household income in 2021, meanwhile, was $70,784. This means households earning between $47,189 and $141,568 would have been considered 'middle class' around the time Biden became president. So, those are the numbers. But the actual cost of living has risen significantly in the past four years or so. Take groceries as an example. Food prices rose by 3.9% annually right before Biden entered office. But then in March 2024, the latest data available by the BLS, prices had risen by over 25%. This means $100 worth of groceries before the presidential election would now cost a little more than $125. Housing costs have also skyrocketed. According to the Federal Reserve's latest data, the median sales price of homes sold in the U.S. was $419,200 in Q4 2024. In Q1 2021, the median sales price was $355,000 — $64,200 less. 'What used to feel like a comfortable income now barely covers the basics in many parts of the country,' Kim said. 'Rising costs of housing, healthcare and everyday living essentials have stretched budgets super thin, making it harder for families to maintain the lifestyle that used to define the middle class.' Exacerbating the issue — and further defining these more recent changes to the middle class — is the fact that wages simply haven't kept up with rising costs. 'While wages have gone up, inflation has steadily outpaced those gains, meaning even people earning well into six figures in certain cities feel like they're just scraping by,' Kim explained. 'The middle class isn't necessarily shrinking — it's just feeling a lot tighter.' According to the Social Security Administration's latest data, the national average wage index was $66,622 in 2023. Back in 2021, it was $60,575. That's only a $6,047 difference. Being considered 'middle class' isn't just about falling within certain income thresholds. Where you live has a major impact on how much money you need to live comfortably. For example, $100,000 will go a lot further in a small town than it will in a metropolitan area. According to Kim, middle-class households should also be able to pay for the following without majorly struggling: Housing (ideally with a manageable or no mortgage) Savings for emergencies Retirement savings Discretionary spending like dining out or traveling Other things that should be covered include healthcare and education. Though the numbers have changed since Biden's first day in office in 2021, the definition itself remains much the same. More From GOBankingRates This article originally appeared on Here's How Much the Definition of Middle Class Changed Since Biden's First Day in 2021
