Latest news with #creditcardcompanies
Khaleej Times
an hour ago
- Business
- Khaleej Times
Credit card spending: Is your plastic really that fantastic?
Every day we pull out a piece of plastic and pay for food, drinks and shopping without even thinking twice about it. Nowadays, it's more likely that we pull out a phone or use our smart watch to pay – but they are still linked to our credit card. And a surprising number of people don't fully understand how interest on their credit card is charged and the associated fees. Here are some of the basic details you need to know. Interest rates Do you know how much interest your credit card company charges you? Monthly interest rates on credit cards in the UAE typically range from two per cent to four per cent, translating to annual rates of between 24 per cent and 48 per cent. That's pretty high when you consider the top rate of interest you'd earn on a UAE savings account is about five per cent. One misconception is when you actually pay interest on your card. In an ideal world, you will pay off your balance in full each month. That way, you avoid paying any interest. But we are not all so financially disciplined. Sometimes, you can't pay the full amount and instead end up paying half of it or just the minimum balance. That's often when the confusion begins as some people think if they pay the minimum amount due, then they won't be charged interest. Sadly, that's not the case. Grace periods A grace period is the time between your statement date and the due date of your payment, which is normally about 21 to 25 days. It does vary among credit card issuers. This grace period applies as long as you pay your full statement balance on time. But if you don't pay the full amount you are charged interest, which is often backdated to the date of the original purchase. Cash advances It's hard to think of a scenario where taking a cash advance on your credit card is a good idea. You will be charged interest the second you take the cash as grace periods don't apply to cash advances. Plus, you are usually charged a higher interest rate than for normal spending on the card. On top of that, you will pay a fee for the cash advance. Instead, consider a small personal loan or overdraft with lower rates. However, some banks are improving their offerings for those who really need the cash – Wio bank lets you borrow from your credit limit with Easy Cash, and charges one dirham per day for every Dh1,000 borrowed. Checking statements Be honest, how often do you look at your credit card statement in detail? Most people dread it coming and quickly move onto something else. But it could pay to go through it properly. Sometimes, transactions get added by mistake or the card has been used fraudulently. Look at what you paid for and make sure you recognise all the merchants. You can also see any penalties and fees you may have incurred, which should encourage you to manage the card better. The wrong card There are hundreds of credit cards out there, all offering different perks. How do you know you are using the right one? Research by comparison site Daleel found that only half of the people they surveyed are confident they have the right credit card for them. A look at Emirates NBD 's website will show you all sorts of card partners including Emirates, Etihad, Dnata, Noon, Lulu, Emaar, Marriott Bonvoy and one called Webshopper. They all offer cashback, air miles or discounts. To choose the right card, you have to match your spending habits with cards that reward those categories. For example, some cards reward certain types of purchases like online shopping, so make sure you only take out this card if you actually do a lot of your shopping online. The same is true for the airlines' cards. Foreign transaction fees Some cards may say they are ideal for travel but then charge you 2-3 per cent per transaction abroad. Look for cards that say 'no FX fees' or 'zero per cent foreign transaction fees' if you travel often. But even if they don't charge a fee, you may not always get the best currency conversion rates. When you get the option, always pay in the local currency as the bank will use the more competitive conversion rates used by Visa and Mastercard. Promotions We all love a good promotion or discount. For credit cards, it could be 'No Annual Fee'. But this might only be for the first year, and then a huge fee kicks in after 12 months. Zero per cent interest deals are always worth double checking. Are they really not charging any interest? Once the introductory offer ends you may then be charged interest if you don't pay off the full balance. T&Cs It would be unrealistic to advise people to read all the literature that comes with a credit card – the small print. But you should get a Key Facts or an 'At a Glance' summary from your bank, while others are turning to videos and other formats to clearly explain the terms and conditions. The more time you can spend reading them, the more informed a decision you can make. For example, while researching this article I browsed a lot of credit cards and landed on the RAKBank World credit card which offers up to 10 per cent on a variety of spending which sounds very generous. But after digging around, I saw that to start earning cashback you need to spend a minimum of Dh10,000 per month on your World Credit Card. That amount might not suit everybody so this is when reading as much of the small print as possible really helps.
CBS News
4 days ago
- Business
- CBS News
Credit card debt, interest rates and what borrowers should do right now
We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. Paying off your high-rate credit card debt should remain a priority, even in today's unique economic atmosphere. unknown/Getty Images The news released this May that credit card debt balances were declining appeared to be positive on the surface. Certainly, a decline in what borrowers owe is preferable to a spike. But upon closer examination, this seemingly good news wasn't exactly what it appeared to be. For starters, credit card balances in the United States in the first quarter of 2025 remained very high, at a total of $1.18 trillion. While that was down $29 billion from the previous quarter, it still represented a 6% rise from the same period in 2024. And with the average credit card debt hovering close to $8,000 currently, there's likely a lot of work left for borrowers to complete to regain their financial freedom. And that work shouldn't be put off any further, particularly in today's unique economic atmosphere. Fortunately, there are multiple debt relief options available that are worth exploring, some of which borrowers may want to get started with as soon as this June. Below, we'll detail why they should act quickly – and how they may want to do so. Start by checking your credit card debt relief eligibility requirements here. Credit card debt, interest rates and what borrowers should do right now Not sure if it's worth taking aggressive action to reduce your credit card debt? Here are three items to consider to help you determine your next steps: Your current credit card debt amount Sure, you may owe less than that $8,000 average amount … or you may owe more. Either way, if you can't pay off what you owe in its entirety, then it may make sense to pursue some form of debt relief. And that doesn't have to mean utilizing the services of a debt relief provider, as options like balance transfer credit cards and debt consolidation loans may be able to be secured on your own, and dramatically reduce your interest rates in the interim, providing a clearer path toward total debt payoff. Just don't sit idle, no matter which option you prefer, as credit card interest compounds daily, turning even a manageable debt load prohibitive. Explore your alternative debt relief solutions online now. The broader interest rate climate If your plan is to wait for the broader interest rate climate to cool and, for that cooling to significantly reduce your currently high credit card interest rates, then you may be waiting for a very long time. Right now, there's almost no chance of a fed rate cut for when the central bank meets again in June (the CME Group's FedWatch tool has a rate pause there listed at nearly a 100% certainty). Rate cuts could become more realistic in July, but even then, by just 25 basis points, which will have little to no impact on your credit card rates (which are influenced by multiple factors besides just the Fed). Being realistic about this interest rate climate, then, and its likelihood to change in a helpful way soon, can better help you move to the next step this June: finding the right debt relief option for your particular situation. Your debt relief alternatives Did you know that you could qualify to have 30% to 50% of your credit card debt forgiven? If you meet certain qualifications, this is certainly possible. But it's not the only way to get rid of your credit card debt with aforementioned items like balance transfer credit cards, debt consolidation loans possible too, along with credit counseling, debt management programs and more all playing critical roles for borrowers in need of a debt solution now. You won't know which is applicable to your unique situation, however, until you've taken the time to explore and research all of them. Consider doing so now, then, and make this June the first stop on your journey toward full financial freedom. The bottom line The economic climate credit card users find themselves in this June isn't exactly a favorable one. With credit card balances high, interest rates elevated and the prospect of relief for either dim, it makes sense to be proactive with an appropriate debt relief approach. By understanding the dynamics of today's economy and being realistic about these developments, borrowers can feel more comfortable exploring their debt relief options and, from there, choosing one (or multiple) that can help them reduce what they owe once and for all.
CBS News
23-05-2025
- Business
- CBS News
3 things to know about defaulting on your credit card debt
We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. There are a few things you should know before you fully default on your credit card debt. Getty Images When your credit card debt starts to spiral, it can feel like you're one unexpected expense away from disaster. And, if your budget is eventually stretched too thin by your growing card payments, putting off a payment or two might not seem like a big deal, at least initially. After all, there are other bills, like groceries or rent, that need to take priority at first. But as the interest charges compound on that debt, what once felt like simply falling behind can turn into a more serious issue: default. And while defaulting on a credit card isn't quite the same as defaulting on a mortgage or car loan, the consequences can still be severe. But despite the consequences, millions of Americans are on the brink of defaulting on their credit card debt right now. Credit card delinquencies have been steadily rising, and serious delinquencies, in particular, which are balances over 90 days past due, have increased significantly year over year. Part of the issue is that with inflation still impacting everyday costs and other economic uncertainties looming, more households are now having trouble keeping up with monthly payments. So when you add in today's nearly 22% average credit card rate, this combination of financial hurdles can be a recipe for serious issues. If you're one of the many who's teetering on the brink of defaulting on your credit card debt, there are a few important things you should know right now. Find out how a debt relief expert could help with your high-rate debt now. 3 things to know about defaulting on your credit card debt Here are three big things to know if you're worried about defaulting on your credit card debt. Default doesn't happen overnight — but it hits hard when it does Contrary to popular belief, you don't enter default the second you miss a payment. Most credit card companies won't consider your account officially in default until it's 180 days (or roughly six months) past due. That said, your credit score can take a hit much sooner. Even one missed payment, meaning a payment that's just 30 days late, can be reported to the credit bureaus and cause your score to drop significantly. Once you hit default, the credit card issuer will typically charge off the debt, meaning they write it off as a loss and may sell it to a third-party collection agency. This doesn't mean you're off the hook for the balance, however. It just means someone else now owns your debt and will aggressively pursue it, whether that's through phone calls, letters or more aggressive collection tactics. Before your account hits default, you may want to reach out to your credit card issuer. Some lenders offer temporary hardship programs or may be open to a modified repayment plan. You can also consider working with a credit counseling agency, which can help you consolidate payments and potentially reduce interest rates through a debt management plan. Explore your debt relief options and start tackling your unpaid debt today. Default can seriously damage your credit (and stay there for years) One of the most lasting consequences of default is the damage it does to your credit report. A defaulted account can remain on your credit history for up to seven years, even if you eventually pay it off. During that time, it can be harder to get approved for loans, rent an apartment or even qualify for a job in certain industries. The earlier stages of delinquency, like 30-, 60-, and 90-day late payments, will also show up on your credit report. But a charged-off account or collections action is a red flag to future lenders, signaling that you may be a high-risk borrower. If your credit has already taken a hit, don't panic, but do take steps to resolve the issue. One option you may have if you can't repay the full balance is debt settlement, also referred to as credit card debt forgiveness. This strategy involves negotiating with your creditors to pay a lump sum that's less than what you owe. Just know that debt forgiveness can also hurt your credit in the short term, but might be better than an ongoing default. This strategy can be tricky to navigate, though, so if you pursue this type of relief, you may want to work with a reputable debt relief company during negotiations. You can be sued for unpaid credit card debt Once your account has gone to collections, there's a real risk of being sued over the unpaid balance (and the additional fees, interest charges and other costs you've incurred), especially if the debt is large or hasn't been addressed for many months. Debt collectors can and often do take legal action to recover unpaid balances, and if they win a judgment in court, they may be able to garnish your wages or bank account depending on state laws. In other words, a lawsuit over defaulted credit card debt is a serious matter, and ignoring it can lead to automatic judgments against you. Many people don't realize that they have the right to respond, negotiate or even fight the lawsuit, though, which leads to more severe issues. If you're facing legal action over your defaulted card debt or think you might be soon, it's time to deal with the problem. You might qualify for protection if you file for Chapter 7 or Chapter 13 bankruptcy, which can halt collection activity and potentially discharge or restructure your debt. While bankruptcy isn't a decision to take lightly, it can be a powerful reset if you're truly unable to repay what you owe. The bottom line Financial setbacks happen, but defaulting on your credit card debt is a serious event with long-term financial consequences, so it's important to do everything in your control to avoid it happening. But if you're behind on payments currently or are facing collections, you have options worth considering. Whether it's reaching out to a credit counselor, negotiating a settlement or exploring bankruptcy, the key is to act early and not ignore the problem. With the right help and a clear strategy, default doesn't have to define your financial future.
CBS News
21-05-2025
- Business
- CBS News
Want to apply for credit card debt forgiveness this June? Start with these 3 items
Before applying for credit card debt relief, cardholders should first consider their alternative relief options. gulfimages If you're starting to doubt your ability to effectively pay down your credit card debt, you're not alone. According to a recent report, credit card balances totaled $1.18 trillion in the first quarter of 2025. While that's actually a decline from the final quarter of 2024, it represents a 6% rise from the same period last year. Combined with credit card interest rates just under a record high 23% and credit card balances averaging close to $8,000 per cardholder, the outlook for many borrowers appears bleak. Against this backdrop, credit card debt forgiveness, which can wipe out 30% to 50% of your debt load, could be particularly attractive right now. If you're starting to explore this unique debt relief option, however, there are some steps you'll want to take before applying in the weeks ahead. Below, we'll detail three items you may want to begin with before a formal application is submitted. Check your credit card debt relief eligibility here to learn more. 3 items to start with before applying for credit card debt forgiveness this June Don't just rush into a credit card debt forgiveness program now (or in the weeks ahead). Instead, first consider the following items: Your alternatives Credit card debt forgiveness may sound like the easiest and most dramatic solution to your credit card debt problem … but is it the most appropriate one? In many instances, it may not be. With debt relief options ranging from credit counseling to debt management programs to debt consolidation loans and balance transfer credit cards, there may be a more fitting alternative for your unique circumstances that may not require the credit score damage and lengthy process that credit card debt forgiveness programs typically mandate. You won't know which alternative is right for you, however (or even if they are), until you've closely reviewed them all. So, consider doing that first to better understand if forgiveness is truly still worth exploring. Compare your top debt relief options online today. Your qualifications As helpful as it may be, you won't be able to just apply for credit card debt forgiveness. You'll need to meet a series of qualifying criteria first. This includes having a debt load of at least $5,000 to $10,000, being delinquent on your existing payments and a financial hardship that you can point to for your inability to make payments as agreed to. Additionally, there may be more qualifications to meet depending on the debt relief servicer in question. It's important, then, to first understand your qualifications. If you don't meet all three, one of the aforementioned alternatives may be more appropriate and you can start with one of those instead immediately, versus getting rejected for forgiveness help in June. Your documentation Documentation is key, no matter which debt relief option you choose, but particularly important for forgiveness programs. As mentioned, many servicers will want to see some formal documentation underlining your inability to make payments. This may mean medical bills, proof of job loss, or more. Without this documentation, you may not qualify for the help you need, even if you meet the other two qualifications. So, consider gathering the appropriate documentation now, before applying, so you have it handy when needed. In some instances, this documentation may not be readily available, but if you know you'll qualify by providing it, it makes sense to start gathering it now, in May, so that you're ready to apply for forgiveness in June. The bottom line Credit card debt forgiveness could be the first step in the path toward regaining your financial freedom this June. Or it may not be. Start the process to determine which it is by exploring all of your debt relief options now and, ultimately, your credit card debt forgiveness qualifications in particular. If you qualify and ultimately deem that this is the optimal relief option for your unique circumstances then proceed to gather the documentation you'll inevitably be asked to provide. By taking these steps now — in May — you can better improve your chances of debt relief success in June and, more importantly, start rebuilding your financial health in the months and years ahead.
