Latest news with #creditcardcompanies
Yahoo
4 days ago
- Business
- Yahoo
Dave Ramsey: Debt Is Most Aggressively Marketed Product in US — 5 Ways To Avoid It
Between home mortgages, travel credit cards and car loans, debt is everywhere. Yet, it's impossible to escape the message that debt is normal, helpful and there is such a thing as 'good debt.' Financial expert Dave Ramsey warns this is a lie, and one that has been aggressively marketed to keep Americans financially trapped. Read More: Explore Next: In his powerful video, Ramsey exposed debt as a product that banks, credit card companies and lenders profit from — at your expense. The cycle of debt is a devastating trap to fall into. Many people work hard their entire lives only to find they have nothing to show for it because their money has been tied up in payments and interest. The promise that debt will help you get ahead is a lie that benefits the lenders — not you. Here are five practical tips to help you steer clear of debt. Create and Stick to a Budget One of the most effective ways to avoid debt is to know exactly where your money is going. Creating a budget helps you plan your spending and ensure you live within your means. Start by tracking your income and expenses, including fixed costs like rent or mortgage, utilities, groceries, and discretionary spending such as dining out or entertainment. Once you have a clear picture, allocate funds for each category. Be sure to prioritize essentials and savings over discretionary spending. A budget isn't meant to restrict you but to give you control. When you stick to your budget, you avoid overspending and needing to use credit card debt to cover the overage. Check Out: Build an Emergency Fund Unexpected expenses like car repairs, medical bills or job loss can derail your finances and push you into debt if you're unprepared. That's why it is crucial to build an emergency fund. The rule of thumb is to save at least three to six months of living expenses in a savings account. This fund acts as a financial safety net, allowing you to cover unexpected costs without relying on credit cards or loans. Even starting with a small amount and consistently adding to it can make a big difference over time. Use Cash or Debit Cards Instead of Credit Cards Credit cards can be tempting, especially with rewards programs and promotional offers. However, they also make it easy to spend money you don't have. Using cash or debit cards helps you stay within your budget because you can only spend what you physically have. When you pay with cash, you feel the immediate impact of your spending, which can curb impulse purchases. Debit cards draw directly from your checking account, so you avoid accumulating balances and interest charges. If you do use credit cards, pay off the full balance each month to avoid debt. Avoid Financing Big Purchases Financing big-ticket items like cars, furniture or electronics might seem convenient, but it often comes with high interest rates and long-term payments that can trap you in debt. Instead, save up for these purchases and pay cash once you've saved enough. This approach requires patience, but it keeps you from paying extra in interest. Prioritize Debt Repayment and Avoid New Debt If you already have debt, make a plan to pay it off aggressively. Focus on paying more than the minimum payments to reduce interest costs and shorten the time it takes to pay off. Methods like the debt snowball, where you pay off the smallest debts first, can help you build momentum and motivation. At the same time, commit to avoiding new debt. This means saying 'no' to unnecessary purchases and resisting the pressure to keep up with other people's lifestyles. Remember, every dollar you put toward debt repayment is a step closer to financial freedom. More From GOBankingRates 7 Things You'll Be Happy You Downsized in Retirement This article originally appeared on Dave Ramsey: Debt Is Most Aggressively Marketed Product in US — 5 Ways To Avoid It 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
22-07-2025
- Business
- CBS News
Is there a grace period on credit card payments?
Between juggling higher grocery bills, increased rent and utilities costs and elevated gas prices, most people are working hard right now to carefully manage every dollar in their budgets. But with inflation continuing to squeeze budgets and many Americans living paycheck to paycheck, that can be a tough task to take on, especially if you're trying to pay off debt simultaneously. When every dollar counts, even the most financially savvy people can find themselves scrambling to meet payment deadlines, and missing a credit card payment becomes an increasingly common concern. Late and missing credit card payments can have a hefty impact on your financial health, adding another layer of stress to an already challenging situation. After all, credit card companies operate on a strict timeline, so if you miss your due date by even one day, you're immediately hit with late fees and penalty rates, right? The credit card industry certainly profits handsomely from these charges, after all, so logic would suggest that the penalty clock starts ticking as quickly as possible. The reality of how card payment due dates work might be more nuanced than you'd expect, though. So, do the credit card late charges start to rack up the moment midnight passes on your due date, or is there some built-in leeway that could save you from immediate penalties? That's what we'll analyze below. Explore the options you have if you're struggling with your credit card debt. The short answer to whether credit card issuers offer grace periods is both yes and no — it depends on what you're asking about. Credit cards do offer a grace period, but it's often misunderstood, and if you're late on a payment, the protection you're hoping for might not apply. Most credit cards come with a grace period on new purchases, which is the time between the end of your billing cycle and your payment due date. During this window, which is typically 21 to 25 days, you can pay off your balance in full without owing any interest. What that means is that as long as you pay the entire balance each month, you can keep using your card without racking up any finance charges. But here's the catch: If you carry a balance from one month to the next, the grace period disappears, and interest starts accruing immediately on new purchases. Now, if you're asking whether there's a grace period for late payments, the story changes. Credit card companies aren't required to give you extra time beyond the due date, and most don't. Once your due date passes, you risk: However, many credit card issuers provide a small informal window (often just a few days) before they apply a late fee or take further action. This isn't a guaranteed grace period, but if you pay as soon as you realize you've missed your due date, you might avoid the worst consequences. Explore the credit card debt relief options available to you now. If you find yourself unable to make your credit card payment by the due date, don't just ignore the problem. Taking proactive steps can help minimize the financial impact. Here's what to do if you're at risk of making a late credit card payment: While many credit card companies do offer informal grace periods for late payments, you shouldn't rely on this flexibility as part of your regular payment strategy. These grace periods are typically brief, unofficial and subject to change based on your payment history and the issuer's policies. The best approach is to treat your credit card due date as firm and build systems to ensure you never miss it. If you do find yourself late on a payment or are struggling to afford your payments, be sure to act quickly to minimize the damage.
Yahoo
18-07-2025
- Business
- Yahoo
How much can a secured credit card raise your score?
A secured credit card is a powerful tool for anyone on a credit-building journey. These cards can be easier to qualify for than other types of credit cards, but they're just as useful for building credit. You can use a secured card as a first step toward establishing great credit — whether you have no credit history or you've made mistakes in the past that left you with bad credit — so you can qualify for more rewarding credit cards, important loans, and lower interest rates in the future. Here's how to get started:What is a secured credit card? A secured credit card requires a refundable security deposit to open. You'll often need a security deposit of at least $200, though the exact amount depends on your card, the issuer, and the terms of your approval. In most cases, that security deposit will act as your line of credit; the amount you pay will be the maximum credit limit you can spend on your card. You might think of it like a debit card, since you can only spend up to the amount that you deposit. If you want a higher limit, you can choose to pay a higher deposit, usually up to a maximum. Because of the security deposit, secured credit cards can be easier to qualify for than unsecured cards. They often charge no annual fees but may have fewer benefits and higher interest rates than traditional credit cards. Once you're approved and open your secured card, you can use it just like any other credit card. Over time, your issuer may offer to refund your deposit and upgrade you to an unsecured credit to increase your credit score with a secured credit card When you apply for a secured credit card, it's important to make sure the issuer regularly reports to all three of the major credit bureaus: Equifax, Experian, and TransUnion. This is how you'll increase your credit score — as long as you're using your card are some of the most important actions you can take to make sure you're increasing your score as much as possible with a secured card: Pay on time: Payment history is the most important factor in your FICO credit score, so a great credit score depends on a strong history of positive monthly payments. That means you should pay at least the minimum on your credit card bill by the deadline each month. Keep your credit utilization rate low: The ratio of how much credit you're using compared to your overall available credit is another influential factor in your credit score. The lower your credit utilization ratio, the better — which can be tough with a secured card that has a low credit limit. Keep an eye on how much you're spending and aim to keep it 30% or less than your overall line of credit. If, for example, your credit limit is $500, you'd want to spend under $150 each month to keep your credit utilization low. Pay off your balances: Carrying a debt balance doesn't necessarily keep you from having good credit, but it can impact your score by increasing your utilization. More importantly, it will cost you a lot of money in interest charges over time. Pay your card balance in full by the due date each month to help keep your utilization low and avoid debt. Another important factor in your credit score is the overall age of your accounts. A longer credit history is better for your score, so it'll grow over time as you continue to use your secured card with these good credit habits in much can a secured card raise your score? How much your new secured card will impact your score depends on how you use it. Building credit takes time, so you'll see the results of making on-time monthly payments and keeping a low credit utilization with your secured card over several months. It may not be instant, but good habits will help your score rise over time. On the other hand, if you have other loans or credit card accounts already on your credit report with missed or late payments, that could negatively affect your score, and reduce any positive impact from your secured card. You can see for yourself how much your secured card is helping to raise your score by regularly checking your credit score and credit report. You'll be able to track your progress over time. Plus, you can keep an eye on your credit report to make sure it's accurate — and quickly take care of any errors that could affect your secured credit cards These are some of our favorite secured credit cards for building credit today: Capital One Quicksilver Secured Cash Rewards Credit Card Why we like it: The Capital One Quicksilver Secured card is a great way to build credit while also earning rewards on spending. The flat 1.5% cash back means you can save money on every purchase you make, no matter the category. There's a $200 minimum security deposit which acts as your credit line, but in as little as six months you can be considered for a higher credit limit without another deposit. As you use your Quicksilver Secured card over time, you can also qualify to upgrade to the unsecured Quicksilver card and get your deposit One Platinum Secured Credit Card Why we like it: You won't earn any rewards with a Capital One Platinum Secured card, but it does have some perks that set it apart from many other secured credit cards. The primary benefit is a potentially low security deposit. When you're approved, you'll be assigned either a $45, $99, or $200 security deposit to open your account with a $200 credit line. You can choose to deposit more for a higher credit limit, and by practicing good credit habits over time, you can qualify to upgrade to an unsecured card and get your full deposit of America® Customized Cash Rewards Secured Card Why we like it: The Bank of America Customized Cash Rewards Secured Card is another option with cash back on your spending — though you'll need to be a bit more proactive to maximize the rewards you earn with bonus categories. Each quarter, earn 3% cash back in your choice category and 2% back at grocery stores and wholesale clubs, up to a combined $2,500 spent across both the 3% and 2% categories. You can change your 3% choice category once per calendar month or keep it the same. This card also has a minimum $200 security deposit which will act as your credit line, but Bank of America periodically reviews your account to determine if you're eligible to get it returned. Editorial Disclosure: The information in this article has not been reviewed or approved by any advertiser. All opinions belong solely to the 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
25-06-2025
- Business
- CBS News
What is a credit card grace period (and why does it matter)?
We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. Taking advantage of what your credit card grace period offers could help you save a lot of money on interest. Getty Images With interest rates remaining elevated and everyday costs eating into budgets, credit card debt has become a heavy burden for a lot of Americans — and it's easy to see why. Right now, the average credit card rate is hovering near 22%, so a single month of revolving a balance can result in serious interest charges. Those extra costs make it even more difficult for the average cardholder to fit their monthly credit card payments into their budgets. However, there's one underrated feature of your credit card that can help you completely avoid those charges if you use it the right way. That feature is called your credit card grace period, and while it might not sound all that exciting, it's a powerful tool that lets you make purchases without paying interest, as long as you follow a few rules. The problem is, though, that most people either don't know how their credit card's grace period works or they accidentally lose it by carrying a balance. That can have a big impact on your finances, as your grace period lets you maximize your credit card benefits while minimizing the costs. So, understanding how your grace period works — and how to keep it — is a lot more important than you may think. Explore your debt relief options and start tackling your credit card debt today. What is a credit card grace period (and why does it matter)? Your credit card's grace period is the time between the end of your billing cycle and your payment due date when you won't be charged interest on new purchases — but only if you pay your full statement balance by the due date. Think of it as a temporary, interest-free loan that typically lasts between 21 and 25 days. Here's how it works in practice: Let's say your billing cycle ends on January 15 and your payment is due February 10. Any purchases you made during that billing cycle won't accrue interest if you pay the full statement balance by February 10. The grace period matters because it's the key to using credit cards without paying hefty interest charges. If you consistently pay your full statement balance by the due date, you'll never pay a penny in interest, regardless of how much you spend on your card. This is how savvy credit card users earn cash back, points or miles while essentially getting short-term loans at 0% interest. However, there's a catch: If you carry a balance from month to month, you typically lose your grace period on new purchases. This means new purchases start accruing interest immediately, even if you haven't received your next statement yet. This is where many people get trapped in the interest cycle without realizing it. Not all transactions qualify for the grace period, either. Cash advances rarely, if ever, have a grace period and instead start accruing interest immediately, often at higher rates than purchases. Balance transfers may or may not have grace periods depending on your card's terms. Find out whether you qualify to have part of your credit card debt forgiven now. How to make the most of your grace period Maximizing your grace period starts with one habit: paying your full statement balance by the due date every single month. Not just the minimum. Not just some of it. All of it. Here are a few ways to stay on top of it: Automate your payments. Set up autopay for the full statement balance, or at least for an amount that clears your account before the due date. Just make sure your bank account can cover it. Set up autopay for the full statement balance, or at least for an amount that clears your account before the due date. Just make sure your bank account can cover it. Track your billing cycle. Know when your billing period ends and when your payment is due. Some savvy cardholders even time large purchases right after a new cycle begins to get more time to pay. Know when your billing period ends and when your payment is due. Some savvy cardholders even time large purchases right after a new cycle begins to get more time to pay. Avoid cash advances. Grace periods generally don't apply to cash advances Grace periods generally Watch out for partial payments. If you only pay part of your balance, you'll lose the grace period on new purchases. Interest kicks in on everything, even if you pay off most of it. If you only pay part of your balance, you'll lose the grace period on new purchases. Interest kicks in on everything, even if you pay off most of it. Don't assume your card offers one. While most cards offer a grace period, not all credit cards come with one. So, be sure to double-check the terms in your cardholder agreement if you're unsure. The bottom line Your credit card's grace period might not come with flashy headlines or rewards points, but it's one of the most valuable benefits your card offers, especially in a high-rate environment. When used properly, it lets you spend without interest and avoid the debt trap that snags so many cardholders. But the key word here is "properly." Once you start carrying a balance, your grace period is likely gone, and the interest starts piling up fast. So, if you're looking to sidestep credit card interest altogether, preserving your grace period is a smart place to start. Treat it like a monthly challenge: Pay your statement balance in full and on time, and you'll come out ahead.
Gizmodo
16-06-2025
- Business
- Gizmodo
Amazon and Walmart May Issue Their Own Company-Crypto
The Genius Act would likely need to pass first. Retailers like Amazon and Walmart pay fees to credit card companies every time a customer uses their Visa or Mastercard. And it's no secret that retailers are not happy with that chunk of change that gets siphoned off. But thanks to the emergence of digital money, these retailers are reportedly itching to get away from the big banks. In fact, they may even issue their own stablecoins, according to a new report from the Wall Street Journal. Amazon's efforts to develop a stablecoin are still in the 'early stages,' according to the Journal, and there are a lot of questions to sort out. There have reportedly been discussions to use outside stablecoins to settle transactions, but there's also the possibility the online giant could develop its own. The prospect of developing your own stablecoin has two sides. For starters: It's pretty easy. Anyone can make their own fake digital money these days. The flip side is that you'd have to maintain substantial financial reserves to indeed put the 'stable' in that stablecoin name. Stablecoins are typically pegged to the dollar, and theoretically, whoever issues the stablecoin is holding a dollar or a dollar's equivalent for every stablecoin they issue. But you can see how that gets dicey quickly. If the stablecoin 'depegs,' meaning one of your coins is no longer worth $1 in U.S. currency, people start selling them for less than they're worth, and the entire house of cards crumbles. And you can see where that leads. You're soon out of business. That, of course, is why regulators would be the other hurdle to any plans for a big company like Amazon to issue its own stablecoin. The Journal notes that the likelihood of retailers like Amazon starting their own crypto would likely hinge on whether the so-called Genius Act passes Congress, which would set up a regulatory framework for stablecoins. Facebook toyed with the idea of issuing its own cryptocurrency back in 2019. CEO Mark Zuckerberg's team dubbed it Libra, but people took to calling the fake money Zuckbucks. Facebook even founded an entirely new entity called Calibra to oversee the project. But after pushback from legislators, things started to get rough for the project. The U.S. House Committee on Financial Services and the Senate Banking Committee held hearings, the name Libra became Diem, and Facebook's project got beat up by critics as a scam to let the social media company print money. It didn't work out, and Facebook abandoned the project. But nobody knows what would happen if a company like Amazon or Walmart started its own stablecoin today. It's an entirely new regulatory environment, to say the least. President Trump has appointed David Sacks as the first 'Crypto Czar,' and Trump himself has a cryptocurrency which has reportedly added billions of dollars to his family's net worth. If there was ever a time for an ambitious big retailer to try it out, this would really be it. Neither Amazon nor Walmart responded to questions emailed Friday. Gizmodo will update this post if we hear back.
