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Why you shouldn’t wait for 2025 to tackle your credit card debt
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It can be tempting (and easy) this time of year to simply swipe your credit card without a second thought. With holiday spending expected to rise this year, many Americans are planning on spending thousands of dollars in the final weeks of 2024. And many already have.
But a delay in dealing with credit card debt is always a mistake, especially in today’s unpredictable economic climate. If you’re one of the average credit card users already in thousands of dollars worth of debt, it could prove costly to wait until 2025 to deal with this expanding issue. Below, we’ll break down three big reasons why waiting until the new year to tackle your existing credit card debt would be a mistake.
See which debt relief option makes sense for your financial situation now.
Why you shouldn’t wait for 2025 to tackle your credit card debt
While January doesn’t feel that far off, waiting just a few months to work through your credit card debt could be a mistake. Here’s why:
Credit card interest rates may continue to rise
Average credit card interest rates have surged recently, hitting a new record high of 23.37% in October. And that’s after inflation dropped for most of 2024 and after the Federal Reserve issued a larger-than-anticipated 50 basis point cut to the federal funds rate in September. So it’s possible, if not likely, that interest rates on credit cards will continue to rise as they’re influenced by a complex web of factors, with the Fed’s actions just one component. And remember that the 23.37% rate is an average, so many users may be paying even more. If you’re one of them, don’t delay action any further.
Explore your credit card forgiveness eligibility here today.
Your debt will compound in the interim
Find a credit card debt calculator online and plug in your outstanding debt and your existing rate. Then extend it over a few months to determine how much it will compound by delaying action. That extra money will be paid to the lender with no material benefit to you, the user. And that calculation will be completed on the assumption that you don’t add to your debt with gift-giving, food shopping and more during this holiday season. If you add that to the equation, the resulting balance could quickly become prohibitive, so do everything you can to avoid letting your debt compound further.
It takes time for relief programs to work
Debt relief takes time to make a dent in your balance. It won’t be an overnight fix or even something that makes a huge difference in just a few months. Credit card debt forgiveness, for example, can take years to reduce your balance and, even then, only usually by 30% to 50%. Delaying this approach until January or later, then, would only make your financial situation worse. Instead, it’s worth shopping around for debt relief companies and exploring your options now so that you can start the process immediately.
Explore your debt relief options here to learn more.
The bottom line
If you’re one of the many Americans stuck with high-interest credit card debt, it makes sense to fight through the temptation to delay it past the holidays and instead work toward ways to reduce what you owe now. With credit card interest rates elevated, the risk of compounding debt and the knowledge that most debt relief options take an extended period to improve your situation, it behooves credit card users to act promptly. By being proactive users can work toward regaining their financial independence both now and in 2025.
Best Buy CEO Corie Barry said Tuesday that personal electronics could become more expensive if President-elect Donald Trump carries out his threat to slap new tariffs on foreign goods, as large retailers scramble to assess the potential impact of the proposed levies on their business.
The warning came one day after Trump said he would impose a new round of tariffs on Mexico, Canada and China on his first day in office. Before the Nov. 5 election, he had proposed a baseline 10% tariff on all U.S. imports and a 60% tariff on goods shipped from China, arguing the such levies protect domestic manufacturers and encourage American companies to create jobs at home.
Any added costs on U.S. imports from the three counties “will be shared by our customers,” Barry told investors in the company’s Nov. 26 earnings call, noting that “there’s very little in [the] consumer electronics space that is not imported.”
“These are goods that people need, and higher prices are not helpful,” she added.
Price hikes are not guaranteed, Barry cautioned, saying that any impact on the retailer’s costs and prices are contingent on how any new tariffs might be implemented.
“I think it’s going to be a very fluid situation as we continue to work through it,” she said, adding that the company will “make sure we do everything we can to keep prices right for our customers.”
Best Buy could try to partly offset the impact of new tariffs by importing more goods ahead of levies taking effect in 2025, as well as working with vendors to source products from countries other than China, Barry said during the call. Roughly 60% of the goods Best Buy sells are imported from China.
“We are already planning for and working with our vendor partners on next steps,” she said.
Barry’s comments are echoed by other retailers and manufacturers bracing for the impact of higher tariffs on their supply chains. The Consumer Technology Association (CTA) has warned that Trump’s proposed tariffs could lead to higher prices for smartphones, laptops and tablets, connected devices, video game consoles, and computer accessories.
Ed Brzytwa, the CTA’s vice president of international trade, said a number of the trade group’s members are “front-loading 2025 imports into 2024 to get out ahead of the tariffs.”
As far as possible price hikes for consumers, “A number of people are waking up now to the fact that this could be a reality,” he said.
If a tax preparer offers you a tax refund product such as a refund advance loan or anticipation check, experts advise to first read the fine print.
That’s because nearly 16% of American taxpayers paid more than $842 million in fees to receive their 2023 refunds. Of those, about 96% used a refund anticipation check, or RAC, the Treasury Inspector General for Tax Administration estimated in a report last week. Another 4% used a refund anticipation loan, or RAL.
These products can appeal to taxpayers who are eager to get their refunds and who don’t want to wait days or weeks for the IRS to deposit the money into their accounts or cut a check. And while the seven tax return preparer companies that account for almost 80% of the total refund products are “largely complying with applicable guidance, not all information was clearly available for consumers,” according to the agency’s review of their websites.
“In some instances, fees and cost information for these products were not clearly advertised, and it required reading the fine print or going through multiple pages to find some cost information,” it stated.
Fees for advance tax refund loans and checks
The RAC fees ranged from $25 to $55 for filing season 2024, according to the report. The average refund for these taxpayers was $3,841, indicating that the cost of the RAC was about 1% of the total refund. The average refund for a fee-based RAL was $6,696.
Refunds might come on prepaid cards, with associated fees that can vary greatly, and many charge fees for out-of-network ATMs, cautions the Consumer Financial Protection Bureau.
Further, many taxpayers qualify for free assistance from preparers certified by the IRS.
“Many taxpayers get their refunds from the IRS in 10 to 21 days,” the CFPB advises. “Waiting a week or two can save you money.”
Here’s how to find a volunteer in your community or online:
- Go to irs.gov and search for “Free Tax Return Preparation”
- Go to AARP.org and search for “Tax-Aide Locator”
- Go to GetYourRefund.org for online tax papration
- Go to MyFreeTaxes.com to prepare your own return with assistance
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