For the roughly 40 percent of U.S. households carrying credit card debt, double-digit interest charges are a constant drain on personal finances. But there are ways to slow that drain — or even plug it.Naturally, step one is to stop adding to that debt. With the median interest rate hovering around 21 percent for credit card balances, that's a very expensive way to borrow.Think of it this way: If you're carrying a balance on a credit card with a 21 percent interest rate, and you use that card to buy lunch, you just took out a high-interest loan to buy lunch.Americans paid banks $104 billion in credit card interest and fees during the 12 months ending in March 2018, according to an analysis of federal data by MagnifyMoney, a LendingTree affiliate. Wow.Step two is coming up with the best plan to pay off that credit card debt, and one good way to do that may sound counter-intuitive — signing up for another credit card.Here's why: To make that debt go away, it has to be … [Read more...] about How to save money while paying off a high-interest credit card balance
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The average credit card balance in Columbus was $5,695 in September, a 4.2 percent increase from September 2017, according to a report from CompareCards, a subsidary of LendingTree, an online marketplace for financial services. In comparison, Americans’ revolving credit balances grew 3.7 percent nationwide during the same period, climbing to a record $1.041 trillion, according to Federal Reserve data. “It’s troubling to me that we’re seeing card balances continue to grow,” stated Matt Schulz, chief industry analyst at CompareCards. “The truth is that if you’re carrying credit card debt when the economy is good, it likely means that you’re not putting enough money away for when things head south. Americans need to commit to making 2019 the year they finally tackle their credit card debt because rising interest rates mean it’s only going to get harder and more expensive to do so in the future.” Meanwhile, prepaid debit cards may … [Read more...] about Central Ohioans’ credit card balances up 4.2%
Ben Tobin USA TODAY Published 4:01 p.m. UTC Jul 2, 2018 Carrying a balance to help improve your credit score? You’re not alone. But you might want to rethink the strategy. More than 1-in-5 credit card users, or 43 million Americans, carry a balance – or pay the minimum to credit card companies, thus always owing them money – to help improve their credit scores, according to a new report from CreditCards.com. But carrying a balance is not one of the factors that go into creating a FICO credit score. Payment history, amounts owed, length of credit history, credit mix and new credit are the only facets rating companies consider when determining credit scores. And though many experts have previously reported this, Creditcards.com’s senior industry analyst Matt Schultz says that the “myth” of the utility of carrying a balance still persists. “This myth has been out there for a long time, and lots of people have debunked … [Read more...] about 43M Americans mistakenly think carrying credit card balance improves credit scores: Survey
Gregory Karp, NerdWallet Published 12:00 a.m. ET May 7, 2018 Conventional wisdom about credit cards is often black and white, from whether you should use cards at all to which types deserve a slot in your wallet. But personal finance is just that — personal, experts say. “Financial advice is best when it is not one-size-fits-all,” said Bruce McClary, spokesman for the National Foundation for Credit Counseling. “Everybody is different in the way they set priorities and manage budget decisions, so it makes sense that some advice may not be a perfect fit for all people.” Credit card tips might be easier to understand when they’re binary — do this, don’t do that — but that advice usually doesn’t apply to everybody. In fact, some advice could hurt more than help. Here’s a sampling of conventional wisdom on credit cards and why it might not apply to you: ■“Never use credit cards.” Cardholders can get in … [Read more...] about When to ignore credit card advice
It is hard to beat the convenience of a credit card for purchases, but does that same convenience make it worth paying your taxes by credit card? It might, but that depends on several factors involving money and time. "Your credit card is usually a high-interest option, but it is an option," opines Betterment head of tax Eric Bronnenkant. Before deciding whether to put your tax bill on plastic, consider the following: Fees – By law, the IRS cannot pay credit card transaction fees. As a result, credit card payments to the IRS are handled through secure third parties approved by the agency. See the IRS website for a list of the approved payment processors and their fees. What to Do When You Owe Taxes But Can't Pay the Bill Credit card fees are percentage-based with a minimum "convenience fee" for smaller bills ranging from $2.50 to $2.69. Percentages range from 1.87 percent to 2.00 percent of the total tax bill depending on the vendor and the type of card … [Read more...] about Should You Pay Your Taxes With a Credit Card?