Latest news with #creditCardDebt
Yahoo
4 days ago
- Business
- Yahoo
How to transfer your credit card balance
If you have outstanding credit card debt, high interest charges can make it difficult to regain control of your finances — especially given today's average rates of over 21%. A balance transfer credit card with an introductory 0% APR is a helpful tool to get back on track. Learn how to transfer your credit card balances to save money and pay off debt faster. A balance transfer is as simple as transferring your balance from one credit card to another. Generally, the purpose of a balance transfer is to help you save with a lower interest rate, since balance transfer credit cards offer special introductory APR periods. APR is the annual percentage rate, or your card's interest rate annualized. Throughout the intro period, you'll get a 0% APR promotional rate on your transferred balance. For example, the Chase Freedom Unlimited® may be best known for its cash-back rewards, but it also offers 0% APR for 15 months after account opening on both balance transfers and new purchases. After that, the card's ongoing variable APR kicks in — but the introductory offer gives you time to pay down your balance without taking on interest charges. At the end of the promotional period, the card's regular variable APR will apply to any outstanding balance, which is why it's important to use the intro period to pay off as much of your debt as you you've decided to pay down debt using a balance transfer, take these steps to get started: There are many balance transfer credit cards available. To find the right one for you, consider the following factors: 0% intro APR period: Promotional APR offers can last anywhere from six to 21 months. The longer that introductory rate lasts, the more time you have to pay down your debt without interest. Approval: Many balance transfer cards require good credit to qualify. Check your credit score and see if you prequalify for your choice card before you apply. Balance transfer fee: A balance transfer fee may apply to the amount you transfer to the new card. It's usually 3% to 5% of the transfer you've narrowed down your options, review each card's terms and conditions. There may be restrictions on how much time you have to make the transfer or on fee charges. For example, some cards require you to make your transfer within the first 60 days of account opening to qualify for the 0% APR. Others may charge a lower balance transfer fee for transfers made within the first four months, then increase the fee for any transfers after that. Read your card's terms before applying to avoid any unexpected fees or surprises later. Once you've found the right card for you, you can complete the credit card application. Prepare to provide personal information like your birth date, mailing address, income, and Social Security number. You may also be asked for a copy of your driver's license or other government-issued ID. When you apply for a new credit card, the issuer will make a hard inquiry on your credit report, which can have a temporary negative effect on your credit score. Though the impact is minimal, it's important to apply for a card you're confident you'll qualify for so you don't take on multiple hard inquiries over a short time period. In most cases, you'll receive a decision right away. If you're denied, the credit card company will send you a letter explaining why through the mail. After opening a new account, transfer your existing balance to the new card. In some cases, you may be able to request your balance transfer during the application process. Other issuers will have an online process for making the transfer after approval or require you to call and request a balance transfer by phone. You'll need information about your existing credit card account number and balance information to make your request. Continue to make at least the minimum payment on your old card until you receive confirmation that the credit card balance has been paid in full. Otherwise, you risk missing a payment and incurring late fees and damage to your credit score. The timeline on your 0% APR introductory period typically starts after approval. As you start to pay down your debt after transferring your balance, make note of the end of the promotional period and when the regular APR starts. To maximize the effectiveness of your balance transfer, aim to pay off the entire balance in full by the end of the intro period; otherwise, you'll once again start to accrue high interest charges on the remaining those with high-interest credit card debt, balance transfers can be appealing for three reasons: Many of today's top balance transfer credit cards have intro periods ranging from 12 to 21 months — giving you more than a year to pay down your debt with 0% APR. You'll save money and pay off your balance more quickly since your entire payment goes toward the principal. If you have multiple cards with balances, it can get confusing to keep up with multiple due dates and balances. You can use a balance transfer card to move the balances of multiple cards to the new one and consolidate your debt to a single card with one monthly due date. Some rewards credit cards offer 0% APR balance transfers. These cards may have a slightly shorter intro period (usually around 12 to 15 months) than other options with no rewards. But they can be useful long-term to save money on your spending even after the intro period ends. The Chase Freedom Unlimited, Blue Cash Everyday® from American Express, and Capital One Quicksilver Cash Rewards Credit Card are all examples of great cash-back cards with solid 0% intro periods for balance transfers. However, make sure you have a budget and can avoid overspending before you choose one of these cards. If rewards and benefits could lead you to spending more than you can afford and taking on debt balances again later on, this may not be the best option. Although transferring credit card balances to another, lower-interest card can be an effective way to save money, there are some drawbacks to consider: It's not free to transfer your balance to another card; credit card issuers usually charge balance transfer fees ranging from 3% to 5% of the transfer amount. For instance, while the Wells Fargo Reflect® Card offers an exceptionally long 21 months of 0% APR on balance transfers, it also charges 5% on the transfer amount. If you transferred a $1,000 balance to that new card, that means your fee would be $50. Compare that to a card like the Citi Double Cash® Card which has a balance transfer fee of 3% as long as you make your transfer within four months of account opening — your total cost would only increase by $30. The higher your debt balance is, the more this fee can make a difference. However, don't let fees deter you from balance transfers. These 3% or even 5% fees are much less than any high-interest credit card APR, and you can still save much more money if you can pay down your balance over the intro period. Moving your balance to a new card can help jumpstart your debt payoff, but it doesn't solve the root cause of your debt. Unless you address the issues that caused you to accumulate debt in the first place, you may just worsen the problem since you'll have a new credit card and credit limit to use. Before you apply for any balance transfer card, make sure you have a plan to pay as much as possible toward the balance each month and a budget to avoid overspending again in the future. To qualify for a balance transfer credit card that offers 0% APR for a specific period, you'll generally need good to excellent credit. If your credit score isn't in that range, you may not be eligible for a balance transfer card. You'll also need enough available credit to transfer your balance once you open the card. Balance transfers do count toward your overall credit limit, so the credit line you get approved for can make a big difference. Otherwise, you won't be able to move all of your debt. A personal loan is another debt consolidation option that can potentially help you lower your interest rate and monthly payments on your debt. Compare our top personal loan picks here. Editorial Disclosure: The information in this article has not been reviewed or approved by any advertiser. All opinions belong solely to Yahoo Finance and are not those of any other entity. The details on financial products, including card rates and fees, are accurate as of the publish date. All products or services are presented without warranty. Check the bank's website for the most current information. This site doesn't include all currently available offers. Credit score alone does not guarantee or imply approval for any financial product.
CBS News
7 days ago
- Business
- CBS News
How to determine HELOC affordability in today's changing rate climate
We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. Before taking out a HELOC, it's important to determine whether you can actually afford this type of borrowing, both now and in the long term. lOvE/Getty Images The Federal Reserve is dealing with a delicate balancing act, trying to do what's necessary to lower inflation without wreaking havoc on the economy. In pursuit of those economic goals, the Fed has maintained the federal funds rate at its current level throughout 2025 to counteract the inflation that has plagued Americans over the past several years. While the hope is that this strategy will smooth things out in the long term, borrowers are bearing the brunt of this choice in the short term. The Fed rate impacts the interest rates on various types of loans, and today's higher-than-average Fed rate has increased the cost of borrowing. With credit card interest rates averaging around 22% and personal loans at 12%, home equity lines of credit (HELOCs) have become a lower-cost alternative. Average HELOC interest rates come in much lower at 8.14% currently after falling below 8% in early April. While that rate is more borrower-friendly, HELOCs have variable interest rates, which can make the payments unpredictable. So, before opening a HELOC, borrowers need to consider how much they can truly afford. We spoke with home lending experts on how to determine HELOC affordability in today's uncertain and changing rate climate. Compare your top home equity borrowing options online now. How to determine HELOC affordability in today's changing rate climate Any time you borrow, you need to make sure you can fulfill your repayment obligations. For HELOC borrowers who use their home as collateral, that's even more important to stave off a potential foreclosure. In that way, the HELOC risks are important to consider as the stakes are high. "Step one will be what the bank is willing to lend you. But while that's a great barometer to say, 'Okay, I'm qualified,' it doesn't necessarily mean that the individual could afford it, and that it makes sense for them. So they have to do their own calculations," says Shmuel Shayowitz, president and chief lending officer at Approved Funding, a licensed mortgage bank. If you're a current or prospective HELOC borrower, here are some ways to find out what you can comfortably afford. Be conservative about tapping in A HELOC allows homeowners to tap their home equity to borrow funds. Considering the average home equity amount is $313,000, homeowners may have access to higher loan limits than some alternatives at better interest rates. However, because HELOC rates are variable, it's important to be conservative so you have room in your budget for any changes. "I think they should think worst-case scenario. I think it never hurts somebody to be thinking conservatively when you're talking about rates that move, let alone rates that can move every month," says Karen Mayfield, national head of originations at Multiply Mortgage, a mortgage-as-a-benefit provider. To help you determine your HELOC affordability, do several exercises and calculate how your payments might change if rates change. "Whatever the interest rate is you're being offered by the lender that you've chosen to go with, I think you should increase that rate by 1% and see how much your payment changes and whether you feel comfortable with that. And then, if you want to be really conservative, increase it by 2%," adds Mayfield. Find out how affordable a HELOC could be today. Know how much you need The great thing about a HELOC is the flexibility. Like a credit card, you can access some of the funds up to your set limit, repay and use the funds again while you're in the draw period. While that's convenient, it can be a slippery slope if you're unclear on how you intend to use the HELOC or are unsure how much you need. Whether you're starting a kitchen renovation you've been putting off or consolidating high-interest debt, know how much you need and try to stick to that amount. So even if you go after a higher line of credit, you're sticking to a plan and only borrowing the home equity amount you need. "What I will always remind people of is just because you asked for, let's say, a $200,000 line of credit doesn't mean you need to spend $200,000. You don't even have to spend $2,000," says Mayfield. Decide if you can pay more than the minimum HELOCs are a unique borrowing tool in that borrowers are typically only required to pay the interest — not the principal — during the draw period. That could potentially be up to 10 years. After the draw period ends, borrowers transition to the repayment period, resulting in a significant jump in the payments, as both the principal and interest must be repaid. If you don't carefully plan for this, it could put a major strain on your budget. That's why it's key to look at your ability to pay more than the minimum when determining HELOC affordability. Paying more than the minimum can help you chip away at your balance and reduce borrowing costs. "When possible, a person can and should pay back principal," Shayowitz says. That can make HELOC repayment more manageable and save you money over the life of the loan. Plus, doing this with a HELOC can still provide a safety net. "Even if you do prepay the principal, you could always draw upon it if you need it later on in the future," adds Shayowitz. The bottom line In today's high-rate climate, a HELOC can be a welcome alternative for homeowners who need access to funds, but it's important to determine HELOC affordability as it has a variable rate that changes. We're in an uncertain rate environment, so you want to be prepared and a well-informed borrower. If a fixed-rate product would be better for you and your budget, another option to look into is a home equity loan. This type of borrowing is not as flexible as a HELOC, as it provides a one-time lump sum of money, but the fixed home equity loan interest rates provide more predictable payments. Before opening a HELOC or taking out a home equity loan, review APRs, terms and fees with various home equity lenders. Understand home equity risks when taking on this type of financing and have a plan to tackle repayment for the best results.
Travel Daily News
21-05-2025
- Business
- Travel Daily News
More than half of Americans plan to spend less on travel
NEW YORK – As rising costs continue to weigh on Americans' wallets, a new Bankrate survey found that the majority of U.S. adults (54%) say they are planning to spend […] NEW YORK – As rising costs continue to weigh on Americans' wallets, a new Bankrate survey found that the majority of U.S. adults (54%) say they are planning to spend less on travel, dining or live entertainment this year, compared with last year. In 2024, 49% planned to spend less than they did in 2023. Among all U.S. adults, 39% say they plan to spend less on dining out, 39% plan to cut back on live entertainment spending (i.e., concerts, sporting events and theater performances) and 38% intend to decrease their travel spending this year. This includes 26% who plan to spend much less on live entertainment, 24% who plan to spend much less on travel and 20% who plan to spend much less on dining out. Only 33% are planning to spend more in at least one discretionary spending category this year, with 22% planning to spend more on travel, 19% on dining and 15% on live entertainment.* 'The cumulative effects of inflation and high interest rates have been straining households, contributing to record levels of credit card debt and causing consumer sentiment to plummet,' explained Bankrate senior industry analyst Ted Rossman. 'Despite those challenges, consumer spending has been more robust than anticipated. Many people have been complaining about economic conditions but continuing to spend anyway, including extras such as travel, dining and live entertainment.' Older generations are more likely to say they plan to cut back on discretionary expenses, compared to younger generations. Generations Spending less on travel Spending less on live entertainment Spending less on dining out Gen Zers (ages 18-28) 29% 27% 31% Millennials (ages 29-44) 36% 35% 39% Gen Xers (ages 45-60) 39% 42% 43% Baby boomers (ages 61-79) 43% 47% 42% Lower-income households are also more likely to plan cutbacks on discretionary expenses than higher-income households. Annual Household Income Spending less on travel Spending less on live entertainment Spending less on dining out Under $50,000 43% 45% 44% Between $50,000 and $79,999 39% 41% 40% Between $80,000 and $99,999 34% 34% 38% $100,000 or more 27% 28% 30% About one-third of U.S. adults (31%) say they are willing to go into debt for at least one of these three discretionary purchases this year, down from 38% in 2024. This includes 22% willing to take on debt for travel, 11% for dining out and 9% for live entertainment. Younger generations are more likely to take on debt for at least one of these discretionary expenses, with 39% of Gen Zers and 37% of millennials willing to do so, compared to 31% of Gen Xers and 21% of baby boomers. Methodology: This survey has been conducted using an online interview administered to members of the YouGov Plc panel of individuals who have agreed to take part in surveys. All figures, unless otherwise stated, are from YouGov Plc. The total sample size was 2,484 U.S. adults. Fieldwork was undertaken between April 2nd-4th, 2025. The survey was carried out online and meets rigorous quality standards. It gathered a non-probability-based sample and employed demographic quotas and weights to better align the survey sample with the broader U.S. population. *Respondents could say much less, somewhat less, about the same, somewhat more or much more
Yahoo
11-05-2025
- Business
- Yahoo
What is a balance transfer — and is it a good idea for debt?
Balance transfers are a useful tool for paying off credit card debt, as they allow you to move high-interest debt to a card with a 0 percent introductory APR. It is important to carefully consider factors like the length of the introductory period, the balance transfer fee and your ability to pay off the transferred balance before the intro period ends. A balance transfer can be valuable for those with a clear debt payoff plan. Credit cards are powerful financial tools that offer an opportunity to build your credit score. It's no secret, though, that they can also pave the path to a mountain of debt. Forty-eight percent of cardholders carry a credit card balance from month to month, according to Bankrate's 2025 Credit Card Debt Survey — a potentially expensive habit with the average credit card interest rate sitting at more than 20 percent. The good news is that many credit cards feature a handy option for helping you dig out from under that pile of debt: a balance transfer. Learn what a balance transfer is and how it can help you get on a stronger path to healthier finances. A balance transfer is a transaction that moves existing debt from one source of debt to a different credit card. If you transfer the balance from a credit card with a higher APR to a card with a lower rate, or even an introductory 0 percent APR period, you can save money on interest as you work to pay down the debt. Ultimately, your goal should be to pay off the debt you transferred entirely during any introductory period. A balance transfer credit card features a 0 percent intro APR period on balance transfers. The longest 0 percent APR periods are usually on cards that offer little more than that lengthy intro period in terms of cardholder benefits. However, some of the best rewards credit cards also tout decent, if slightly shorter, balance transfer offers. But, if your goal is to get out from under debt without distractions or the temptation to earn rewards, focus on choosing a card based on the length of the balance transfer period you need and leave the rewards-earning for another time. A balance transfer works as a debt payoff strategy, allowing you a period of time to pay down debt without paying interest on what you owe. For example, if you have a $5,000 debt on a card with a 19.99 percent APR, you would pay about $691 in interest to pay off that debt in 15 months, with payments of about $379 monthly. On the other hand, if you transfer that debt to a 0 percent intro APR card with a 3 percent balance transfer fee, you can pay $344 monthly to pay off your debt in the same time frame without racking up any interest. Learn more: Determine how much you could save with Bankrate's balance transfer calculator Some balance transfer cards allow you to transfer more than credit card debt — including car loans, student loans and personal loans. Currently, Chase and American Express are the only major issuers that don't allow transfers of non-credit-card debt. Consider your interest rates first That said, keep in mind that you shouldn't transfer any debt that you aren't going to be able to pay off fully during the 0 percent promotional window if it has a lower interest rate than the balance transfer card's regular APR. For example, if you have a car loan with a 7 percent interest rate, transferring it to a balance transfer credit card with a 29.99 percent regular interest isn't likely to make sense if you'll need longer than the promotional period to pay your debt in full. You can do a balance transfer in response to debt you accrued unexpectedly, such as in emergencies, or simply because of poor budgeting you're now working to correct. However, you can also take a proactive approach. For example, if you have a large purchase coming up as part of a planned home improvement project, you could pay for the purchase with a rewards credit card and then transfer that balance to a balance transfer credit card. That way, you earn rewards on your big purchase and take advantage of an intro 0 percent APR period to pay it off interest-free. Deciding if a balance transfer is the right move depends on your specific situation and financial goals. Ask yourself these following questions: The primary benefit of a balance transfer is avoiding interest while you pay down debt. Therefore, they are best for people with a lot of high-interest debt to pay down. By moving debt to a new credit card with a 0 percent intro APR offer, you get the chance to save money on interest and pay down the balance at a faster pace. If you need extra time to pay off a big credit card purchase, transferring the balance to a balance transfer card can be a smart move. If you manage to pay off your balance before the intro period ends, you can successfully dodge interest that may otherwise have been added to your balance. If juggling multiple balances becomes too much, consolidating multiple balances to one card means you have only one payment to keep up with. Even better, it may come with a potentially lower monthly payment. Since you aren't paying high interest anymore, you can also potentially pay off your debt more quickly. If you sign up for a balance transfer credit card and aren't able to fully pay off the amount you transferred before your 0 percent introductory APR period ends, you will begin accruing interest on your unpaid balance at the card's regular APR. At this point, you may want to prioritize paying off your remaining debt more quickly, seeing if you can negotiate a lower interest rate with your lender or applying for another balance transfer card. Some people get balance transfer credit cards with good intentions but find themselves racking up new balances on their cards, even as they work to pay off their old debt. If you can't commit to paying off your credit card debt without taking on new debt, a balance transfer credit card might not be the right option for you, as it could land you in even more debt overall. If the amount of debt you have is larger than the potential credit limit on a new card, or if you have a low credit score or need a longer debt repayment period, it's worth considering a personal loan. Though you won't find an interest-free intro period, the best personal loans from banks and other financial institutions tend to offer lower rates than credit cards do. Dig deeper: The pros and cons of balance transfers Transferring an existing balance to a new balance transfer credit card is a relatively straightforward process. Here's a step-by-step: Apply for a balance transfer card. Choose a balance transfer card that offers the length of intro 0 percent APR you need to fully pay down your debt (or get as close as possible). One note: You usually can't transfer a balance from one card to another card with the same issuer. Request the balance transfer. Sometimes you can initiate this process as part of your card application. You'll need to provide the amount you want to transfer, the name of the issuer, your account number and other details. Wait for the transfer to complete. Once the issuer approves your transfer, it can take a few days to a couple of weeks for the process to be completed. Continue paying off your first card. While you wait, make sure you continue making payments on your old account so you don't accrue late fees or other penalties. Soon, you'll see the new balance, along with any associated balance transfer fee, in your new card account. Make a plan for paying off your balance. Now that the balance is on your new card, do the math and make a plan to pay off as much of the balance as possible during the intro period. Remember to add in your balance transfer fee and divide the total balance by the number of months you have to pay it off in order to find your needed monthly payment. Learn more: Our complete guide to initiating a credit card balance transfer If you're under a mountain of high-interest debt, a balance transfer can help you save on interest and pay down what you owe more quickly. Before applying for a balance transfer card, analyze your bills to understand the types of debt you owe, how much you owe and to whom. Then, compare the best 0 percent intro APR credit cards on the market to find a fit with your budget and debt payoff plan. Sign in to access your portfolio
