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How to pay off credit card debt in a year (or less)

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Hand with a lot of credit cards with copy space on orange background
If you’re trying to pay off your credit card debt quickly, there are ways to expedite the process. 

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Persistent inflation issues have continued to impact the nation, but recent data shows that the inflation rate improved slightly last month, dropping to 3.4% in April compared to the year prior. That’s a significant decline from what we saw from 2021 to 2023, when inflation climbed a cumulative 16.9%. However, today’s inflation rate is still higher than the Federal Reserve’s 2% target rate, which has resulted in the Fed keeping interest rates elevated in an effort to cool inflation. The agency indicated earlier in the year that it would likely reduce the federal funds rate in 2024, but for now, it remains at a 23-year high.

That’s bad news for credit card users now paying higher interest rates on their debt. The agency reports the average credit card interest rate is 22.63%, with many cardholders paying upwards of 30% interest on their outstanding debt balances. As a result, many Americans who carry a credit card balance from month to month are struggling to stay current on their accounts. In fact, data from the Federal Reserve Bank of New York shows that 6.4% of all credit card accounts are 90 days past due.

Credit card debt can damage your finances in the short and long term, so paying it down as quickly as possible is crucial. While this task may seem daunting, the right strategies can simplify the process. 

Need extra help with your credit card debt? Find out how the right debt relief company could help.

How to pay off credit card debt in a year (or less)

Here are some of the most effective methods to tackle your credit card debt once and for all.

Contact your credit card issuers

Before examining some longer-term methods to pay down your credit cards, there’s an action you can take right now to potentially lower your interest charges, and that is to request a rate reduction from each of your credit card issuers. If you’ve been a loyal customer for a while and always pay your account on time, they may grant your request. It’s one of the most direct ways to reduce interest charges, and all it takes a phone call and a few minutes of your time.

Gregory G. Guenther, a financial planner with GRANTvest Financial Group in New Jersey, says this request could also include additional benefits.

 “I encourage my clients to call the credit card companies, request to speak with a manager, and ask for interest or penalty forgiveness, a temporary pause on interest and a reduction in the interest rate,” Guenther says. 

According to Guenther, it’s key to get a decision-maker on the phone and be ready to explain the reason for your request. 

“There are often life circumstances and important context involved in the situation that can increase the successful outcome of the request,” he says.

Explore your credit card debt relief options here.

Review your budget

While securing lower interest rates from your credit card company could be a quick win to kick-start your debt-reduction efforts, don’t forget the basics. Namely, take a look at your financial situation and budget to determine how you got in debt, where your money is going and where you could make changes to lower your expenses.

“Start with reviewing your budget carefully [and] review what’s necessary versus ‘nice-to-haves’ [and] where you can try to spend less,” says Li Tian, CFP and investment advisor representative at LPL Financial. “If you’ve had high interest rate credit debt for a while, something is not working and needs to change. Find ways to spend less, but also try to pay more to chip away the existing debt.”

Pay more than your minimum payment

Credit card companies make money on the interest you pay each billing period when you carry a balance from month to month. The longer they can charge you interest, the more money they stand to make. 

It’s not surprising, then, that the minimum payment they charge is typically a mere 2% to 4% of your balance. If you pay only your minimum, plan on being in debt for a long time.

Let’s say you have a $3,000 credit card balance with minimum monthly payments of $60. With minimum payments only — in this case, 2% of your balance — it’ll take you nine years and one month to zero out your balance, while paying $3.504 in interest. 

However, if you pay an additional $40 each month, you’ll pay off your balance five years and seven months early (42 months total) and spend $1,193 — a 66% savings.

Consolidate credit card debt

If you’re facing overwhelming high-interest credit card debt but have good credit, consolidating them into a single account can simplify your finances. You’ll only have to make one monthly payment and you might save on interest charges. 

Two of the most common ways to consolidate credit card debt are through 0% introductory APR balance transfer credit cards and debt consolidation loans:

  • 0% introductory APR balance transfer credit cards: Balance transfer credit cards allow you to transfer credit card balances interest-free for a specific period, typically 12 to 21 months. That could be enough time to pay off or significantly reduce your credit card balance, especially since you aren’t paying interest on the debt. However, resist the urge to rack up debt on your old cards, or you could end up in a larger debt hole. Also, bear in mind that any remaining debt balance after the introductory period expires is subject to the card’s standard rate. Even after paying a balance transfer fee of 3% to 5% of the transferred amount, you could come out ahead with such substantial interest savings.
  • Debt consolidation loans: Debt consolidation loans are personal loans that allow you to combine your debts into one loan account. You’ll repay the installment loan each month for a specific period at a fixed interest rate. According to the Federal Reserve, the average interest rate on a 24 personal loan is 12.49% currently, which is substantially lower than average credit card rates. One perk of debt consolidation loans is that you’ll have a payoff date you can circle on your calendar, which differs from open-end credit card accounts. Keep in mind, though, that personal loans often include origination fees, which can run as high as 10% of the loan amount.

The bottom line

Having the right mindset is critical, says Kevin Coombs, CFP and lead financial planner at Donaldson Capital Management. 

“People can easily feel overwhelmed by their debt, like they’re drowning in it and will never be free of it. With this mindset, it’s easy to feel hopeless … and [they] don’t take action to improve their circumstances. It’s often helpful to think of their debt as temporary and fixable,” Coombs says.

Consistency is the key when it comes to paying off your debt quickly. Whenever you have extra money, consider applying it to your credit card balances before you have a chance to spend it. Reinforcing good habits like this can keep you on track and help you stay motivated.



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EPA finalizes stricter rules limiting kids’ exposure to lead paint

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Washington — Two weeks after setting a nationwide deadline for removal of lead pipes, the Biden administration is imposing strict new limits on dust from lead-based paint in older homes and child-care facilities.

A final rule announced Thursday by the Environmental Protection Agency sets limits on lead dust on floors and window sills in pre-1978 residences and child-care facilities to levels so low they can’t be detected.

Paint that contains lead was banned in 1978, but more than 30 million American homes are believed to still contain it, including nearly 4 million homes where children under the age of 6 live. Lead paint can chip off when it deteriorates or is disturbed, especially during home remodeling or renovation.

“There is no safe level of lead,” said Michal Freedhoff, EPA’s assistant administrator for chemical safety and pollution prevention. The new rule will bring the United States “closer to eradicating lead-based paint hazards from homes and child care facilities once and for all,” she said.

The EPA estimates the new rule will reduce the lead exposures of up to 1.2 million people per year, including 178,000 to 326,000 children under age 6.

Lead is a neurotoxin that can irreversibly harm brain development in children, lower IQ, cause behavioral problems and lead to lifelong health effects. It also affects other organs, including the liver and kidneys.

The new rule, which takes effect early next year, targets levels of lead dust generated by paint. Currently, 10 micrograms per square foot is considered hazardous on floors, and a concentration 10 times that high is considered hazardous on window sills. The new rule brings both of those levels down to no detectable lead.

The proposed rule also would reduce what level is allowed when a lead-abatement contractor finishes work on a property where lead has been identified as a problem. These levels would be 5 micrograms per square foot on the floor and 40 micrograms per square foot for sills.

Individuals and firms that perform abatement work must be certified and follow specific work practices. Testing is required afterward to ensure dust-lead levels are below the new standards.

Environmental justice and public health experts called the EPA rule long overdue, noting that lead poisoning disproportionately affects low-income communities and communities of color.

“We can all breathe a little easier now that the EPA has significantly lowered its dust lead standard to protect children,” said Peggy Shepard, co-founder and executive director of WE ACT for Environmental Justice, a New York-based advocacy group.

Shepard, who serves on the White House Environmental Justice Advisory Council, said public health experts have long understood there is no safe level of lead in a child’s blood, yet New York state leads the nation in cases of children with elevated blood levels. Black children in Harlem living below the poverty line are twice as likely to suffer from lead poisoning as poor white children, she said.

The U.S. government has gradually been reducing the standard for what counts as poisonous levels of lead in children’s blood, with the most recent change occurring in 2021. But the EPA rule marks an effort to take more proactive action.

“When you are relying on the blood lead level in children to indicate whether there is lead in the environment, we are basically using the children as canaries in the mine,” said Dr. Philip Landrigan, a Boston College biology professor who directs the school’s Program for Global Public Health and the Common Good.

The National Child Care Association said when the lead rule was proposed last year that it could hurt many financially struggling child-care centers – especially those in low-income neighborhoods, where the facilities tend to be older. Without appropriate federal funding, the rule could push small, local child-care centers to close, the group said.

Earlier this month, the federal Department of Housing and Urban Development announced $420 million in grants to remove lead hazards from homes, including HUD-assisted homes. Additional HUD grants will continue to be available to help with lead paint removal, the White House said.



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Indiana man gets life in prison for 1975 killing of teen who “fought for her life”

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An Indiana man has been sentenced to life in prison for the 1975 killing of a 17-year-old girl who was found dead in a river after she failed to return home from her job at a church camp.

A Noble County judge sentenced Fred Bandy Jr., 69, on Tuesday to a life term with the possibility of parole in Laurel Jean Mitchell’s August 1975 death. The Goshen man was convicted of first-degree murder this month following a bench trial.

A message was left seeking comment from Bandy’s attorney Wednesday.

He was charged along with John Wayne Lehman, 69, of Auburn, Indiana, last year in Mitchell’s killing. Lehman was sentenced to eight years in prison this month after pleading guilty to conspiracy to commit murder.

Mitchell was found drowned in the Elkhart River on Aug. 7, 1975, the morning after she failed to return home in North Webster, about 140 miles northeast of Indianapolis.

laurel-jean-mitchell-screenshot-2024-10-24-062940.jpg
Laurel Jean Mitchell

WTTV


Although Mitchell’s cause of death was ruled as drowning, police say the autopsy report suggested that she “had fought for her life,” so police initiated a murder investigation.

Prosecutors charged Bandy and Lehman in Mitchell’s killing in February 2023, nearly a half-century later.

Lehman said in an August deposition that Bandy raped Mitchell and drowned her. Lehman denied participating in the rape or the murder and said his fear of Bandy kept him from trying to stop the crimes, The News-Sun of Kendallville reported.

According to a probable cause affidavit, investigators said they believed Bandy and Lehman “forcibly, deliberately drowned” Mitchell after taking her to the river in Bandy’s car.

A DNA profile was obtained in recent years through testing on Mitchell’s clothing, which was saved along with other evidence collected in 1975. According to the affidavit, Bandy voluntarily provided a DNA sample in December 2022 to state police, and testing determined he was 13 billion times “more likely to be the contributor of the DNA in Laurel J. Mitchell’s clothing than any other unknown person.”

The DNA testing came after three people who were teens at the time of Mitchell’s killing tied Bandy and Lehman to the crime based on incriminating comments they had made about her death, the affidavit states.

CBS affiliate WTTV reported that because Bandy had to be sentenced by 1975 standards, the potential outcomes were either life with the possibility of parole or the death sentence, prosecutors said. The state’s death penalty as of 1975 was later declared unconstitutional, ruling out that option.



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New Zealand airport with 3-minute cap on farewell hugs “surprised how much global interest” there’s been

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Wellington — A New Zealand airport has imposed a three-minute limit on farewell hugs, sparking a worldwide debate over how long to cling on for a cuddle. Bosses at the international airport in the southern city of Dunedin say they were surprised by the viral response to their new rule in the car drop-off zone.

“To keep things moving smoothly, we’ve installed new signage, including the ‘Max hug time 3 minutes’ sign,” said airport chief executive Daniel De Bono. “It’s our way of being a little quirky and reminding people that the drop-off zone is for quick farewells.”

“And don’t worry,” added De Bono, “just a 20-second hug is enough to release oxytocin and serotonin, the happy hormones that boost well-being, so three minutes is plenty of time to say goodbye and get your dose of happiness.”

New Zealand Airport Hugs
A sign informing of a time limit for visitors to the passenger drop-off area outside Dunedin International Airport, in Momona, New Zealand, Oct. 8, 2024.

Sarah Soper/AP


People who want a longer hug can use the parking lot, where the first 15 minutes are free, he added.

The hug restriction made headlines worldwide — and prompted a divided online response.

“I’m just glad there’s no minimum hug time. A ‘see ya soon’ suffices,” one woman commented on the airport’s Facebook page.

“Hug Police!? This is just weird! Hugs are proven to have many benefits not to mention mental health,” said another poster.

The small airport, which was used by fewer than 1 million passengers last year, said it had imposed the hug time limit in September, with little initial reaction.

“We have just been surprised how much global interest there has been,” said the airport’s marketing and communications executive, Sarah Soper.



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