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3 big credit card debt mistakes to avoid this fall
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Credit card debt is a growing issue nationwide with the total amount now sitting at $1.14 trillion, the highest level on record. This surge in card debt is paired with a concerning trend: an increase in the number of people falling behind on their payments. About 9% of credit card payments are now seriously delinquent and about 20% of credit card users are maxed out.
Part of the issue is that lingering inflationary pressures, still-high borrowing rates and a weakening job market have made it hard for many to manage both their everyday expenses and their credit card debt payments. In addition, some cardholders have been forced to use credit cards to help cover essentials like groceries, rent and gas. While that can bridge the gap between your income and expenses, the average credit card rate is near 23%, so the interest charges can compound quickly.
As these challenges mount, it’s important to ensure that you’re tackling your card debt in the most efficient manner possible — while also avoiding a few big mistakes this fall. By steering clear of the below issues, you’ll be better prepared to prevent your debt from spiraling out of control.
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3 big credit card debt mistakes to avoid this fall
Make sure to avoid these three big credit card debt mistakes this fall.
Assuming that credit card rates will drop (and make your debt cheaper)
With the Federal Reserve expected to cut rates by 25 basis points in September, you may be under the assumption that your credit card rates will decrease in tandem, making your debt easier to manage. However, this assumption could lead to a dangerous mistake.
While a rate cut might lower interest rates on other types of loans, credit card rates are less likely to respond quickly to Fed rate changes, if at all. That’s because credit card interest rates are tied to various factors, including the prime rate and the card issuer’s internal risk calculations. So, even with the Fed rate cuts, credit card rates are unlikely to drop significantly in the near term.
Given that credit card APRs are currently sitting at a record high, waiting for rates to drop could be a costly decision. You may want to take proactive steps to get rid of your debt instead. Strategies like paying more than the minimum or consolidating your debt can help you reduce the amount of interest you’re paying each month. Delaying your efforts in the hopes of cheaper borrowing costs, though, may only lead to higher overall balances.
Explore the best credit card debt relief options available now.
Letting the interest charges continue to compound
At today’s high rates, credit card interest charges can quickly turn what was a manageable balance into an unmanageable financial burden. If you’re carrying debt from month to month, the interest charges will compound, increasing the total you owe. For instance, a $5,000 balance with a 23% APR that isn’t paid off quickly can balloon in a matter of months. And the longer you allow interest to accumulate, the harder it becomes to escape the debt cycle.
To avoid letting interest pile up, you may want to explore options for minimizing or eliminating interest charges completely. One option is transferring your balance to a card with a 0% introductory APR offer, which allows you to pay down the principal balance without accruing more interest for a set period. Another strategy is to consolidate your credit card debt with a lower-interest loan. Failing to address compounding interest, though, will only make your financial burden grow heavier.
Not taking advantage of the help available to you
Many people mistakenly believe that seeking help with their credit card debt will harm their credit or make their financial situation worse. In reality, there are debt relief options that can provide significant help without major repercussions for your finances. Debt relief companies offer a range of services, including debt consolidation, debt management plans and even negotiation with your creditors to reduce your outstanding balance or interest rate. These services can make it much easier to manage your debt.
Ignoring these resources out of fear or misinformation can be a costly mistake, though. For example, enrolling in a debt management program can help you create a structured repayment plan and may even lower your interest rates or card fees, all while protecting your credit score. Similarly, negotiating with your credit card issuer can result in paying less than you owe (whether through a lump-sum settlement or other concessions), which can be helpful if you’re struggling due to a temporary financial setback. So rather than avoiding professional help, it’s important to explore all the options available to you.
The bottom line
Credit card debt is a growing issue in the current economic climate, but by avoiding these common mistakes, you can start taking control of your finances this fall. Instead of waiting for rates to drop or allowing interest to snowball, taking proactive steps now can help you reduce your debt burden before it grows. And remember, there are resources out there to help you, no matter how overwhelming your situation may seem.
TRENTON, N.J. — Democratic Newark City Council President LaMonica McIver has defeated Republican small businessman Carmen Bucco in a contest in New Jersey’s 10th Congressional District that opened up because of the death of Rep. Donald Payne Jr. in April.
McIver will serve out the remainder of Payne’s term, which ends in January. She and Bucco will face a rematch on the November ballot for the full term.
McIver said in a statement Wednesday that she stands on the “shoulders of giants,” naming Payne as chief among them.
She cast ahead to the November election, saying the right to make reproductive health choices was on the ballot as well as whether the economy should benefit the wealthy or “hard working Americans.”
“I will fight because the purpose of politics and the purpose of our vote is to give the people of our communities and our nation a bold voice,” she said.
Bucco congratulated McIver on the victory in a statement but said he’s looking forward to the rematch in November.
“I am not going anywhere,” he said in an email. “We still have a second chance to make district 10 great again!”
Who are LaMonica McIver and Carmen Bucco?
McIver emerged as the Democratic candidate in a crowded field in the July special election. A member of the city council of New Jersey’s biggest city since 2018, she also worked for Montclair Public Schools as a personnel director and plans to focus on affordability, infrastructure, abortion rights and “protecting our democracy,” she told The Associated Press earlier this summer.
Bucco describes himself on his campaign website as a small-business owner influenced by his upbringing in the foster system. He lists support for law enforcement and ending corruption as top issues.
The 10th District lies in a heavily Democratic and majority-Black region of northern New Jersey. Republicans are outnumbered by more than 6 to 1.
It’s been a volatile year for Democrats in New Jersey, where the party dominates state government and the congressional delegation.
Among the developments were the conviction on federal bribery charges of U.S. Sen. Bob Menendez, who has denied the charges, and the demise of the so-called county party line — a system in which local political leaders give their preferred candidates favorable position on the primary ballot.
Democratic Rep. Andy Kim, who’s running for Menendez’s seat, and other Democrats brought a federal lawsuit challenging the practice as part of his campaign to oust Menendez, who has resigned since his conviction.
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Sean “Diddy” Combs at same Brooklyn detention center that held R. Kelly, Sam Bankman-Fried, other high-profile inmates
A second judge refused to grant bail to Sean “Diddy” Combs on Wednesday and he could remain in federal custody at a Brooklyn detention center until his trial for sex trafficking charges. Combs joins other high-profile inmates, such as singer R. Kelly, fallen cryptocurrency mogul Sam Bankman-Fried, rapper Ja Rule —even Al Sharpton served a brief stint— who were held at the same federal detention center.
Notorious for its horrible conditions —inmates won a $10 million class action settlement after enduring frigid conditions during an 8-day blackout in 2019— the waterfront industrial complex, MDC Brooklyn, houses 1,200 inmates.
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Violence and corruption have long plagued the facility; U.S. District Judge Gary R. Brown of the Eastern District of New York wrote the detention center had “dangerous, barbaric conditions” in a recent sentencing opinion. Two inmates were stabbed to death in recent months and several correction officers have been convicted for smuggling contraband and accepting bribes.
Combs joins a list of high-profile personalities that have landed at the MDC Brooklyn, partly because the city’s other federal detention center, MDC New York, closed in 2021, also due to horrible conditions. The disgraced financier Jeffrey Epstein died by suicide in his cell there in 2019. “Numerous and serious” instances of misconduct among corrections staff gave Epstein the opportunity to kill himself, a subsequent federal watchdog investigation found.
Kelly sued the federal detention center in 2022 for wrongly putting him on suicide watch after his sentencing. Kelly sought $100 million because he said the detention center knew he wasn’t suicidal after he was convicted in 2021 for racketeering and violating the Mann Act, which bars transporting people across state lines for prostitution.
Yuki Iwamura/Bloomberg via Getty Images
Former crypto billionaire Bankman-Fried survived on bread, water and sometimes peanut butter when he was in the MDC Brooklyn, his attorney said, because the detention center continued to serve him a “flesh diet” despite requests for vegan dishes.
Ja Rule stayed at the MDC Brooklyn for a brief time before being released after serving most of his two-year sentence for illegal gun possession. Most of his prison time was spent in a state prison in New York.
Sharpton served a 90-day sentence in 2001 and went on a hunger strike for protesting the U.S. Navy bombing of the island of Vieques, in Puerto Rico.
Combs was taken into custody on Monday and according to an indictment unsealed Tuesday he was charged with sex trafficking, racketeering conspiracy and transportation to engage in prostitution.
His attorney Marc Agnifilo told CBS News, “It’s impossible to prepare for a trial from where he is,” after a first federal judge denied Combs bail on Tuesday.
U.S. Magistrate Judge Robyn Tarnofsky agreed with prosecutors who argued the hip-hop mogul, who is accused of using his business empire as a criminal enterprise to conceal his alleged abuse of women, is a flight risk and poses an ongoing threat to the safety of the community.
Agnifilo said the part of the detention center where Combs is being held is “a very difficult place to be.”
contributed to this report.
