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CBS News
a day ago
- Business
- CBS News
How to consolidate $50,000 (or more) in credit card debt without hurting your credit
We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. Consolidating $50,000 in credit card debt can be tricky, especially if you want to keep your credit score intact. Getty Images If you're buried under $50,000 or more in credit card debt, you're likely feeling some serious financial strain. For starters, the minimum payments on that high of a balance will barely make a dent and the compounding interest charges are relentless. Plus, juggling multiple balances each month can be downright overwhelming. And now, with credit card APRs hovering near record highs — averaging about 22% currently — it's easy to see how your credit card balances can balloon even faster than you can pay them down. You aren't the only one facing this type of issue, either. The total amount of credit card debt nationwide recently surged to $1.18 trillion, according to data from the Federal Reserve Bank of New York. And while inflation has cooled significantly compared to recent highs, the costs of everyday goods are still high, forcing more people to lean on plastic to cover basic expenses. For those dealing with credit card balances of five figures or more, debt consolidation can offer a much-needed reset by simplifying the repayment process and lowering your interest costs. But here's the tricky part: When you owe this much, the wrong move could do more harm than good, especially when it comes to your credit. So if you're thinking about consolidating $50,000 (or more) in credit card debt, it helps to understand the ways you can do it without wrecking your credit score. Find out how to start tackling your high-rate debt now. How to consolidate $50,000 (or more) in credit card debt without hurting your credit Depending on your credit profile and financial situation, the following options can help you get out from under that mountain of debt without damaging your credit health: Take out a personal debt consolidation loan A personal loan is one of the most straightforward ways to consolidate high-rate credit card debt, especially if you have strong credit and a solid income. These unsecured loans let you pay off all your cards at once and replace them with a single fixed monthly payment. How it works: You apply for a lump-sum personal loan, use the funds to pay off your credit card balances, and then make one consistent monthly payment towards the loan for a set period. The big benefit is that interest rates on personal loans average about 12% currently, so this move could help you save a significant amount on the interest charges. You apply for a lump-sum personal loan, use the funds to pay off your credit card balances, and then make one consistent monthly payment towards the loan for a set period. The big benefit is that interest rates on personal loans average about 12% currently, so this move could help you save a significant amount on the interest charges. Why it helps your credit: Once your credit cards are paid off, your credit utilization Once your credit cards are paid off, What to consider: Many lenders cap personal loans at $50,000, so if your total credit card debt is higher, you might need to combine this option with others or look for lenders who offer higher limits. You'll also want to make sure the loan terms don't come with steep origination fees or early repayment penalties. Learn more about your debt consolidation options today. Use a home equity loan or HELOC If you own a home and have built up equity, you may be able to borrow against it to pay off your credit cards. Home equity loans and home equity lines of credit (HELOCs) often come with significantly lower interest rates than credit cards or unsecured loans because they're secured by your property. How it works: With a home equity loan, you get a lump sum and pay it back in fixed installments over time, which is ideal if you need to consolidate a specific amount. A HELOC, on the other hand, works more like a credit card: You borrow as needed up to a certain limit and only pay interest on what you use. With a home equity loan, you get a lump sum and pay it back in fixed installments over time, which is ideal if you need to consolidate a specific amount. A HELOC, on the other hand, works more like a credit card: You borrow as needed up to a certain limit and only pay interest on what you use. Why it helps your credit: Like personal loans, using home equity to pay off credit cards can dramatically lower your credit utilization ratio. And because these loans don't count as revolving debt, they can help your credit profile appear more balanced and stable. Like personal loans, using home equity to pay off credit cards can dramatically lower your credit utilization ratio. And because these loans don't count as revolving debt, they can help your credit profile appear more balanced and stable. What to consider: This option only works if you have enough equity in your home, and you'll need a good credit score to qualify for favorable rates Work with a credit counseling agency For those with less-than-perfect credit or limited borrowing options, a credit counseling agency can be a helpful lifeline. These agencies offer debt management plans that bundle your unsecured debts into one monthly payment and often come with reduced interest rates negotiated on your behalf. How it works: After reviewing your financial situation, a certified counselor sets up a debt management plan, usually with lower interest rates and waived fees. You send one monthly payment to the agency, and they distribute it to your creditors. After reviewing your financial situation, a certified counselor sets up a debt management plan, usually with lower interest rates and waived fees. You send one monthly payment to the agency, and they distribute it to your creditors. Why it helps your credit: Unlike debt settlement, these plans don't require you to stop paying your creditors. That means your accounts remain in good standing (or return to good standing over time), helping you avoid the major score drops that come from charge-offs or collections. Unlike debt settlement, these plans don't require you to stop paying your creditors. That means your accounts remain in good standing (or return to good standing over time), helping you avoid the major score drops that come from charge-offs or collections. What to consider: Some creditors may freeze your accounts while you're on the plan, which could slightly reduce your available credit. But overall, your credit score is likely to improve as you make consistent on-time payments. The bottom line Consolidating $50,000 or more in credit card debt is a serious move, but if done wisely, it can help you break free from financial stress without wrecking your credit. To do that, though, you'll need to choose a strategy that fits your credit profile, income and long-term goals. But whether you qualify for a personal loan, can leverage your home equity or need help from a credit counseling agency, there are paths forward. So, take the time to explore your options, and don't be afraid to ask questions. The right move today can lead to financial freedom tomorrow.
News.com.au
13-05-2025
- Business
- News.com.au
Mortgage holder pain set to remain until 2026
Consensus has firmed that the Reserve Bank of Australia will announce its second rate cut in the cycle in May, but it won't immediately solve many household budgets. The cash markets and experts are widely predicting the Reserve Bank of Australia will slash the cash rate by 25 basis points to 3.85 per cent when they meet on May 20, following a first rate cut in February. Equifax executive general manager Moses Samaha said while a rate cut would be welcomed by many, particularly those under financial strain, it's not a silver bullet. 'There is always a group of customers who remain challenged,' he told NewsWire. 'If we look at New Zealand for example, they've had five rate cuts since August and we really haven't seen a material improvement in that cohort of customers or the amount of customers who are in arrears.' 'That tells me, any cushion these rate cuts are providing for those customers is really getting eaten up elsewhere and there's a number of external factors that make it hard to pinpoint'. Previous modelling released by Equifax in February showed the full effect of a rate cut takes between six to nine months to be felt. Mr Samaha said getting relief from the central bank will certainly help Australians, but due to the high levels of debt in Australia, it will likely take more than a single rate cut to help some households. 'The average house value is about one and a half-million dollars, we probably need quite a few changes before its material. 'If you do the rough maths, assuming five changes at 25 basis points, you need all five rate cuts to create around $20,000 in savings on an annualised basis and it'll probably take us a year to get there.' Mr Samaha said other cost of living presures could absorb any savings from a mortgage. 'The question is where does the money go from a hierarchy perspective for a consumer. Does it go to improving their position on a home loan, does it go to their expenses and that changes over time depending on their priorities,' he said. Separate research from Roy Morgan shows there are 990,000 Australians considered 'extremely at risk', which is significantly above the 10 year average of 14.7 per cent. There are currently 644,000 more at risk of mortgage stress Australians today compared with three years earlier. Roy Morgan chief executive Michele Levine said 1,451,000 million Australians are at risk of mortgage stress, although this number is coming down. 'After increasing for three straight months from October, the RBA's decision to reduce interest rates by 0.25 basis points to 4.1 per cent in mid-February has now led to back-to-back monthly reductions in mortgage stress which is now at its lowest since June 2023 – when interest rates were first increased to 4.1 per cent.' According to Equifax Australians are taking matters into their own hands, with refinancing growing 6.5 per cent year on year in April up to 36.7 per cent of all inquiries. Despite the pressure some households are feeling, Mr Samaha said there are some green shoots emerging for households. 'Its not all doom and gloom. 'We are still below prepandemic stages in terms of the number of customers that are in arrears but it is one to watch. He said Australian consumer confidence is growing on the back of more financial relief coming and a stable government which is showing up in other parts of the market, including demand for both secured and unsecured debt. 'Equifax data from New Zealand shows that while anticipation of rate cuts increased mortgage demand, interest really picked up steam after two to three rate cuts,' he said. 'This suggests homeowners are just getting started, and the mortgage market will significantly heat up in the coming months.' Mr Samaha said the growth in credit card and personal loans is a sign of strength for the Australian economy. 'They are signs that the economy is getting back to normal where people rely and use credit to drive outcomes they need in their lives,' he said. 'It was a different story for a few years after the pandemic, so we are definitely into a more steady state part of the market.
The Independent
12-05-2025
- Business
- The Independent
More than half of Americans are using layaway or buy-now-pay-later programs to cover everyday essentials
Buy now, worry later. recent survey reveals that more than half of Americans are using layaway or buy-now-pay-later (BNPL) programs to cover everyday purchases, including groceries. According to a survey by New York-based marketing agency 52 percent of Americans now rely on installment-based payment services. The most popular items purchased through BNPL include medium to large products like electronics, furniture and home goods, with an average minimum price of $250. But 31 percent of consumers also reported using those programs for essentials like groceries, highlighting the financial strain many households are facing. BNPL programs are especially popular among younger Americans, with 59 percent of Gen Z and 58 percent of millennials opting for flexible payment methods. The survey also found that 35 percent of consumers plan to use BNPL more frequently in 2025, a figure that jumps to 65 percent among Gen Z. Popular BNPL providers like Afterpay, Affirm, PayPal Pay in 4 and Klarna have become critical financial tools for many Americans, offering flexible installment plans with no interest, helping consumers manage their rising expenses. These options won't affect credit scores if payments are made on time. Economic uncertainty appears to be adding to the trend. Fifteen percent of survey participants said they tried BNPL in 2025 due to the increased cost of living. Last month, President Donald Trump announced sweeping 'reciprocal' tariffs on 90 countries, sparking market turbulence and straining global trade relations. While a 90-day pause on these tariffs, excluding China, briefly boosted market confidence, significant uncertainty remains. At the same time, rising grocery prices are squeezing household budgets. A NielsenIQ report shows that the average price of eggs in April 2025 was $1.72 higher than in April 2024. The USDA also projects that overall food prices will rise slightly faster than their historical average this year, affecting everyday items like seafood, coffee, wine, nuts and cheese.
Yahoo
08-05-2025
- Business
- Yahoo
GA daycare owners worry about staying in business due to rising inflation
Childcare providers are feeling the financial strain of inflation. Some owners and operators said they are struggling to stay open due to the cost of supplies. 'The last six months is when it really started affecting me to the point where I started rebudgeting,' Analyn Meyers told Channel 2's Courtney Francisco. She opened her daycare, Eden's Fruits, in Powder Springs five years ago. She said inflation's impact on supplies like diapers and food could force her to shut down. 'If I don't get three more kids in here, I don't believe that I'll last by the, until the end of the year,' said Meyers. [DOWNLOAD: Free WSB-TV News app for alerts as news breaks] Dr. Pamela Robinson, Ph.D., owns TreeBranches Learning Academy in Smyrna. She's been embedded in the childcare industry for 20 years. 'I'm afraid, not only for myself, but other providers who are making a difference,' said Robinson. She said smaller, family childcare providers in metro-Atlanta are starting to seriously struggle. 'Can't afford supplies, can't afford the food,' said Robinson. She started growing her own garden. She said some are considering raising tuition, but she said parents already struggle to pay the price. So, that could drag down enrollment numbers. TRENDING STORIES: 'I stay up at night trying to figure out how I'm going to make money,' said Robinson. If they are forced to close, they predict parents could have trouble maintaining work and finding affordable care in an industry already struggling with low wages and staffing shortages. 'It's a domino effect and you are hurting children,' said Meyers. They are part of a group of providers and parents who plan to rally outside the Capitol on Monday, May 12, in an effort to grab lawmakers' attention. [SIGN UP: WSB-TV Daily Headlines Newsletter]
