Latest news with #creditcarddebt
CBS News
5 days ago
- Business
- CBS News
How long will it take to pay off $40,000 in credit card debt?
Credit card debt has reached alarming heights for millions of Americans, with many cardholders now carrying balances that would have seemed unthinkable just a few years ago. For example, the average cardholder now carries about $8,000 in total credit card debt, but with so many people now reliant on their credit cards to make ends meet, some cardholders are carrying a lot more than that. And if you're dealing with a hefty level of credit card debt — let's say $40,000 worth — even the most disciplined cardholders can find themselves trapped in a cycle where the monthly payments barely make a dent in the balance. That's because at today's nearly 22% average credit card rate, the mathematics of this type of high-rate debt can work against you in brutal ways. When you're carrying $40,000 worth of debt across multiple cards, the interest charges alone can easily cost you hundreds of dollars per month, and if you're only making the minimum payments, that money is going almost entirely toward interest rather than reducing what you actually owe. This creates a situation in which years of payments can pass without meaningful progress. How long will it realistically take to dig out of a $40,000 credit card debt hole, though, and what strategies can help you do it faster? Here's what you need to know. Find out whether you qualify to have your credit card debt forgiven now. Let's look at several realistic repayment scenarios for a $40,000 credit card balance at the current average rate of 22.76%: If you stick to minimum payments, which is typically around 1% of your balance plus interest, your minimum payment would start at about $1,166.67 per month. Here's how long it would take to pay off what's owed: If you can commit to a slightly higher fixed payment of $1,200 per month, here's how long it would take you to pay off the full balance: Here's how long it would take to pay off with a more aggressive $1,500 fixed monthly payment: And, here's how long it would take for those who can make more substantial monthly payments of $1,800: Note, though, that these calculations assume you're not adding any new charges to your cards, which is a critical factor that's easy to overlook when planning your debt elimination strategy. Learn more about the debt relief strategies available to you today. When you're dealing with $40,000 in credit card debt, traditional budgeting and payment increases might not be enough. Here are debt relief approaches specifically designed for large balances: Debt settlement, also referred to as debt forgiveness, is often the most viable option for substantial credit card debt. Through this process, you or the debt relief company you work with negotiate with your creditors to settle the debt for a lump sum payment that's less than what you owe. While it can vary, the average debt settlement typically results in paying 50% to 70% of the original balance. While debt settlement will impact your credit score and may have tax implications, it can provide a realistic path to becoming debt-free in two to four years rather than decades. Consolidating your debt can be a smart approach if you have decent credit and can qualify for rates significantly lower than your credit cards. A $40,000 debt consolidation loan at 12% APR over five years would cost about $889 monthly but save you tens of thousands in interest compared to making just the minimum payments. Transferring your balance to a card with a 0% promotional interest rate can be more complex with large amounts of credit card debt because most cards have transfer limits. However, you might be able to move portions of your debt to a card with a 0% APR promotional offer, giving you breathing room to attack the principal more aggressively. If you enroll in a debt management program, the credit counseling agency you work with can help you come up with a realistic payment plan and negotiate reduced interest rates and fees with your creditors, often cutting your rates to a fraction of what they currently are. This approach keeps your accounts in good standing and is less damaging to your credit than debt settlement. Filing for bankruptcy might be appropriate if your debt-to-income ratio is unmanageable and other debt relief options aren't viable. Filing for Chapter 7 can eliminate credit card debt entirely, while Chapter 13 creates a structured repayment plan. Carrying $40,000 in credit card debt is undeniably serious, but it's not an insurmountable issue. It's important to recognize, though, that making just the minimum payments will keep you trapped for decades while costing you a hefty amount in interest. So, it's important to come up with a plan that lets you tackle this amount of debt in a better way, whether through aggressive payment increases, debt consolidation or another type of debt relief. The longer you wait, though, the more expensive your debt becomes, so evaluate your options and choose the strategy that aligns with your financial situation and your long-term goals.
CBS News
6 days ago
- Business
- CBS News
Want to pursue credit card debt forgiveness this August? Do these 5 things now.
High credit card balances can feel impossible to escape, especially right now, as today's high credit card interest rates can cause the interest charges to compound quickly. And, that's especially true for those making just the minimum payments, as the majority of that money goes toward interest rather than the principal balance. As the balance on your credit card grows, though, debt forgiveness — which is a debt relief strategy where you try to settle your debt for less than what's owed — may feel like the only way out. But while credit card debt forgiveness can help you save substantial amounts compared to your current credit card debt, the process isn't as simple as calling up your credit card company and asking for part of your debt to be forgiven. Having any portion of your debt forgiven can be complex, requiring strategy, preparation, and in many cases, some tough trade-offs. If you rush in without a plan, you could hurt your credit, face unexpected tax bills or end up no better off than where you started. So, if you're serious about pursuing credit card debt forgiveness this August, now is the time to prepare. Find out how you can start the credit card debt forgiveness process today. Taking the steps outlined below will help you prepare for the debt forgiveness process and could even improve your chances of success. If you're serious about pursuing debt forgiveness, you cannot continue adding to your balances, or you'll have a much harder time during the negotiation process. This might seem obvious, but it's a step many people struggle with. So, put your cards away, remove them from your wallet and delete them from any online shopping accounts. The goal here is to avoid any new charges that could derail your debt relief efforts. Your creditors are much more likely to negotiate if they see you're not continuing to rack up bills while seeking relief. And, most debt forgiveness programs require that you stop using credit cards entirely anyway, so reining in your usage now will benefit you in multiple ways over the long run. Learn more about debt forgiveness and your other debt relief options now. Before you can pursue any form of debt relief, including debt forgiveness, you need to have a clear picture of exactly what you owe, so gather statements for every credit card, store card, and revolving credit account you have. Then, use that information to create a spreadsheet that includes the creditor name, current balance, minimum payment, interest rate and payment due date for each account. Don't forget about any cards you might have tucked away in a drawer, either. Those balances count, too. Once you've completed this step, the inventory you've created will serve as your roadmap and help you prioritize which debts to address first. Many people are surprised to discover they owe more than they initially thought, making this exercise both eye-opening and essential. Creditors and debt relief programs want to see legitimate financial hardship before they'll consider forgiving portions of your debt, so start gathering documentation that supports your case. This can include recent pay stubs, unemployment notices, medical bills, divorce papers or any other paperwork that demonstrates why you're struggling financially. You may also want to write a brief hardship letter explaining your situation in your own words, which should clearly outline the ongoing financial issues that are impacting your ability to pay. This documentation will be crucial whether you're working directly with creditors or through a debt relief company. When you pursue debt forgiveness, you can either attempt to negotiate directly with creditors on your own or you can work with a debt relief company instead. Taking a DIY approach requires confidence and persistence, but it can also save you thousands of dollars in debt relief fees. However, many people choose to work with debt relief companies to negotiate on their behalf, as doing so can improve the odds of a successful settlement. Not all companies are reputable, though, so if you're going to take this route, be sure to do your homework and look for companies that: Creditors are more likely to settle if you can offer a substantial payment upfront. So, it can be helpful to open a dedicated savings account and start setting aside every spare dollar you can to use toward those lump-sum settlement offers. This step can be helpful even if you're planning to use a debt relief company to help navigate the debt forgiveness process, as any company you work with will require you to put money aside each month for the same purpose. And remember: The more you can save, the stronger your negotiating position will be — and the faster you can resolve your debt. Pursuing credit card debt forgiveness isn't a quick fix, but with proper preparation, it can provide a pathway out of overwhelming debt. And, the steps you take this August will set the foundation for the outcome, so take time now to do things like evaluate your finances, save for a settlement and document your hardship. The process isn't easy, but with the right groundwork, you'll be better positioned to negotiate with creditors and move one step closer to a debt-free future.
CBS News
18-07-2025
- Business
- CBS News
4 credit card debt relief options high earners can pursue now
Think a high six-figure salary protects you from racking up credit card debt? You may want to think again. While it's easy to assume that earning more results in wealth accumulation, not debt accumulation, it turns out that credit card debt can be an issue for nearly every type of earner. Case in point? A recent BHG study shows that 62% of high earners — categorized in this case as those earning $300,000 per year or more — still struggle to keep their balances under control, defying the myth that a high income equals financial security. So, why do even top earners get stuck in the debt cycle? Well, there are numerous reasons for it, but in large part, the issue boils down to two words: lifestyle creep. For many high earners, as paychecks grow, so do the expenses, from bigger homes and luxury cars to private school tuition and lavish vacations. Add in other factors, like higher tax brackets and sticky inflation, and suddenly that hefty paycheck doesn't stretch nearly as far as you'd expect. And, without strategic planning, large financial obligations and easy access to credit can leave even high earners living paycheck to paycheck. That doesn't have to be the case, though. If you're earning a high salary, there are targeted debt relief strategies you can use to crush your credit card debt for good. Find out what credit card debt relief options are available to you today. The following credit card debt relief options may be worth considering if you're earning a high salary: Debt consolidation lets you roll multiple high-rate credit card balances into one fixed-rate loan, and pursuing this path now could help the right borrower save significant amounts on interest charges. After all, the average credit card rate is closing in on 22%, just under a record high, meaning that the compound interest charges can rack up quickly, but the average personal loan rate is closer to 12%. So, swapping out your high-rate card debt for a loan with a rate that's 10 points lower can be a good move. And, because the average high-income earner has both a hefty spending capacity and a credit score of 774, which is categorized as "very good," they can generally qualify for loans with top rates that are large enough to cover six-figure balances. That makes debt consolidation worth serious consideration if you're a high earner, as this move can translate into hundreds or thousands of dollars in saved interest per year. Learn how the right strategy could help you get out of debt for good. If you qualify for a 0% APR balance transfer offer, you can move your high-rate debt to a single card and focus on paying off what's owed without being charged interest for a period of 12 to 21 months or more. And, because high earners are often given access to higher credit limits due to their higher salaries, this route can be a great way to get rid of your debt without more interest charges accruing. Given today's high average credit card APR, taking advantage of the opportunity to wipe out interest may be particularly compelling. Doing so could save you thousands of dollars worth of interest charges, provided that you pay off what's owed during the promotional period. Just remember that once the promotion expires, the full rate kicks in, so paying off the balance during the initial period is key. Another way to get some relief from your credit card debt is to simply pick up the phone and ask your issuer for a lower APR. High earners with strong payment histories often have more leverage in these conversations than they realize. Card issuers want to retain reliable, profitable customers, after all, and if you're carrying a large balance, they may agree to reduce your rate to keep you from moving your debt to a competitor. While a lower rate won't erase your credit card debt, it can significantly reduce the cost of carrying it as you work toward paying it off faster. For example, if you're currently paying 22% interest on a $50,000 balance, negotiating even a modest reduction to 16% could save you hundreds of dollars each month on interest charges. High earners often juggle complex financial situations between bonuses, stock options, equity compensation and income taxes. But a good advisor can parse through that complexity to create a tailored debt-payoff plan. For example, redirecting a bonus or stock sale toward high-rate debt can deliver huge returns if done strategically. Working with a debt coach can help curb lifestyle creep by keeping you accountable and adjusting habits so rising income doesn't mean rising spending. This route may not result in the same types of savings as you'd get from other approaches, but it's an extra layer of protection for your finances, and right now, with economic pressure rising, that guidance can turn good intentions into real progress. Being a high earner doesn't make you immune to the challenges of credit card debt. Despite having more resources, more than half of high earners still struggle to keep up with their monthly payments according to a recent study, so if you're facing this type of issue, you aren't the only one — and more importantly, you have options to pursue. Whether through balance transfers, debt consolidation or direct negotiation, you may be able to reduce your interest costs while creating a sustainable path to debt freedom. Whatever option you pursue, though, it's equally important to address the underlying spending habits that created the debt to ensure these relief strategies lead to lasting relief rather than a temporary fix.
CBS News
18-07-2025
- Business
- CBS News
Can you qualify for credit card debt relief while on Social Security?
For millions of retirees, Social Security is the financial lifeline that keeps the bills paid each month. But as sticky inflation forces prices to inch upward on essentials like groceries and utilities, those fixed monthly benefits, which average just under $2,000 per month currently, don't always stretch far enough. As a result, many older adults are leaning on credit cards to cover the gaps. But with an average rate of over 21%, any credit card debt you carry can quickly shift from a temporary solution to a cycle of minimum payments and ballooning balances. Dealing with rapidly compounding credit card debt can be tough for just about any cardholder, but carrying high-rate card debt during retirement can be especially stressful, as your income isn't likely to increase in the future. If you're in this situation, you may be wondering if there's a way to get some relief from your credit card bills — and may also wonder whether seeking help could put your hard-earned benefits at risk. The short answer is that when it comes to credit card debt relief, the solutions that work best for traditional wage earners might not be the right fit for those reliant on Social Security benefits. Below, we'll detail what to know about qualifying for credit card debt relief while relying on Social Security. Find out how to get more help with your credit card debt today. Being on Social Security doesn't automatically exclude you from credit card debt relief programs, but your options and how they're structured might look different compared to someone with a regular paycheck. That's because many debt relief programs are designed around your total income, expenses and assets, not specifically where your income comes from. The challenge for Social Security recipients, though, lies in how debt relief companies evaluate eligibility. Most programs assess two key factors: your ability to demonstrate genuine financial hardship and your capacity to make payments toward a solution. Social Security recipients often easily meet the hardship requirement, as fixed incomes that don't keep pace with inflation create clear financial strain. The payment capacity requirement, however, can be trickier to navigate. Debt relief providers will typically assess your monthly income and expenses to see if you can afford the payments required to qualify for the options available to you. If they find that you have enough room in the budget to afford those payments, you can typically qualify to enroll. Some of the debt relief strategies that may be possible to pursue while on Social Security include: Explore your debt relief options to find the right solution now. Certain debt relief options tend to align better with the realities of fixed income. For example, debt management plans often work well for seniors on a fixed income because they consolidate payments and reduce interest rates and fees without requiring new loans, credit checks, or meeting strict qualifications. Debt settlement programs may appeal to those facing severe hardship, as the relief that comes with this strategy can be significant. However, this approach requires you to stop payments temporarily to save up for lump-sum settlement offers, which can harm your credit score and lead to collections calls — a trade-off many seniors aren't comfortable with. Credit card hardship programs can also be a helpful option for seniors on Social Security. Many credit card companies are willing to work with retirees to lower or pause payments for a set period, which can give you valuable breathing room while you stabilize your finances. Debt consolidation may be worth considering as well. However, limited income may make approval tough, especially when it comes to getting approved for the best rates and terms, so other options are generally a better fit for most retirees. And, while bankruptcy has some major downsides, it can also be worth pursuing for seniors with few assets and significant debt. Trying to manage credit card debt while on Social Security presents unique challenges, but the good news is that your benefits provide a foundation of protected income that many debt relief strategies can build upon. The key is to choose an approach that works with your fixed income rather than against it. If you need help determining what strategy works for your unique situation, it may benefit you to consult with a debt relief expert who can help you understand the approaches that work well for those with limited income.
Yahoo
14-07-2025
- Business
- Yahoo
I've been married 10 years and just found out my husband has been hiding $50K in credit card debt
Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below. After 10 years of marriage, it can be hard to find new ways to surprise your spouse. But as some couples would tell you, that might not be such a bad thing. Especially when the well-kept secret has to do with money. Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 5 of the easiest ways you can catch up (and fast) You don't have to be a millionaire to gain access to this $1B private real estate fund. In fact, you can get started with as little as $10 — here's how For one wife, it took a decade of marriage before her husband came clean: he's dug himself into a hole of $50,000 in credit card debt and he doesn't know how to get out. Now, in addition to dealing with how this may impact their relationship, the wife is wondering — rather, stressing — about the legal and financial implications for her personally. What does it really mean when someone married for, say, 10 years wasn't aware of their husband owing over $50,000 to creditors? With the average American credit card debt hovering around around $7,321 in the first quarter of 2025, this predicament is, unfortunately, more common than it might seem. While many couples take a 'what's mine is yours, and vice versa' approach to finances, that's a choice they make together. And so much depends on your husband's attitude here. If he's contrite and this is your first issue in 10 years, you might handle this very differently than if he's been known to hide things from you. Your husband is certainly not alone in this debt trap. Americans have an absolute mountain of credit card debt — $1.182 trillion, to be exact. You may decide to take on the debt as a couple. In which case, keep in mind that credit card debt is among the country's most expensive forms of debt. Over the last 10 years, average interest rates on credit cards have almost doubled from 12.9% in late 2013 to around 24.33% — the highest level recorded since the Federal Reserve began collecting this data in 1994. For most people, avoiding debt — especially the expensive type — is their biggest challenge. The first step? Pay off high-interest debt as soon as possible. If you have significant equity in your home, consider using a HELOC (Home Equity Line of Credit) to consolidate debt, reduce interest rates, and speed up repayment. A HELOC is a secured line of credit that leverages your home as collateral. Depending on the value of your home and the remaining balance on your mortgage, you may be able to borrow funds at a lower interest rate from a lender as a form of revolving credit. Rather than juggling multiple bills with varying due dates and interest rates, you can consolidate them into one easy-to-manage payment. The results? Less stress, generally reduced fees, and the potential for significant savings over time. Your husband might also consider credit counseling. A reputable counselor can help create a debt repayment plan and provide free financial education resources on managing your money. Ultimately, you'll probably need to have a few frank conversations to get back on the same page when it comes to spending. Dave Ramsey reminds us that "debt isn't a math problem; it's a behavior problem.' Read more: Rich, young Americans are ditching the stormy stock market — But maybe things aren't so straightforward or simple. If you're worried your husband is drowning in debt and might try to take you down with him, you'll want to find out how your state handles financial responsibilities differently when it comes to marriage. Divorce or the death of a spouse can impact this, too. Most states follow common law, where each spouse is responsible only for debts in their own name. You're generally not liable for your spouse's credit card debt unless you co-signed or share the account. Still, creditors can sometimes go after jointly owned assets, like a home or bank account. Nine states — Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin — use community property laws. In these states, most debts and assets acquired during the marriage are considered shared, even if only one spouse incurred them. That means you could be responsible for debts your spouse took on during the marriage. Since financial responsibilities in marriage can be complex and vary by state, it's a smart move to talk with a financial advisor. A trusted, pre-screened financial advisor can help you understand your exposure, protect your assets, and plan a path forward. Finding the right advisor for your needs is simple with Their platform connects you with experienced, qualified financial professionals in your area who offer personalized guidance and support in managing market fluctuations and optimizing your portfolio mix. According to a Bank of America study, over 90% of the country's richest individuals work with a financial advisor. Wealthy people know that having money is not the same as being good with money. Here are the 6 levels of wealth for retirement-age Americans — are you near the top or bottom of the pyramid? This tiny hot Costco item has skyrocketed 74% in price in under 2 years — but now the retail giant is restricting purchases. Here's how to buy the coveted asset in bulk Car insurance in America could climb to a stunning $2,502/year on average — but here's how 2 minutes can save you more than $600 in 2025 Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan 'works every single time' to kill debt, get rich in America — and that 'anyone' can do it Money doesn't have to be complicated — sign up for the free Moneywise newsletter for actionable finance tips and news you can use. This article provides information only and should not be construed as advice. It is provided without warranty of any kind. Melden Sie sich an, um Ihr Portfolio aufzurufen.
