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How much does credit card debt cost now?

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You know credit card debt can be expensive, but you might be shocked at exactly how costly it is. 

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Credit cards are commonplace, and more than eight out of every 10 adult Americans have one in their wallet. These accounts make spending money relatively easy. All you need to do is swipe the card and get your product or service — and then worry about paying the debt back later. 

However, credit card minimum payment structures typically keep consumers in debt for a significant period of time. That, combined with high interest rates, can make seemingly convenient credit card purchases quite costly. But just how expensive is credit card debt? 

Find out how fast you could get out of debt today.

How much does credit card debt cost now?

There are a few factors that play a role in how costly credit card debt is. Those include your balance, your interest rate, your annual fees and how your minimum payment is calculated. According to TransUnion, the average outstanding debt per cardholder in the United States is about $6,088 and the average interest rate on credit cards is 21.47%

Moreover, the Consumer Financial Protection Bureau (CFPB) says the average annual fee on credit cards is about $94.  

So, how much does $6,088 at approximately 21% interest cost if you make just minimum monthly payments and pay $94 per year in annual fees? Here are a few examples based on popular credit card minimum payment calculations: 

  • 1% of the balance plus interest: You’ll pay a total of $10,028.52 in interest over more than 24 years. Considering a $94 annual fee, you’ll also pay a total of $2,256 in annual fees over that time, bringing your lifetime interest and finance charges to $12,284.52 on $6,993 in credit card debt. 
  • 2.5% of your balance (inclusive of interest): You’ll pay a total of $13,246.20 in interest. It will take you over 31 years to pay the debt off, adding $2,914 in total annual fees at a rate of $94 per year. That means you’ll pay a total of $16,160.20 in interest and finance charges on $6,993 of credit card debt.
  • 5% of your balance (inclusive of interest): You’ll pay $3,189.08 in interest over 9 years. You’ll pay an additional $846 in annual fees, bringing your total interest and finance charges to $4,035.08.  

Take advantage of debt relief solutions that could save you money now

How to cut the cost of credit card debt

“Debt happens,” says Julie Beckham, AVP, financial education development and strategy officer at Rockland Trust. “Fortunately, getting out of debt happens too! You just need a plan that is motivating and achievable.” 

Here are a few things you can do to get out of debt faster and spend less in interest and finance charges in the process: 

Take advantage of debt relief services

One of the best ways to cut the cost of credit card debt is to reach out to a debt relief service for help. Debt relief services usually help in one of two ways: 

  • Debt consolidation: Debt consolidation experts start by learning more about your financial position. They use what they’ve learned to negotiate better rates with your current lenders and create an effective, yet affordable payment plan. You then make a single monthly payment to the debt consolidation company and they’ll make payments to your lenders on your behalf until your debts are paid off. 
  • Debt settlement: Debt settlement companies usually start by assessing your financial situation and creating a payment plan for you. You stop making payments to your credit card companies and pay the debt settlement company instead. The debt settlement company generally saves your payments in a special-purpose savings account. Once you’ve saved enough to start settling your debts, the debt settlement company negotiates the principal balance of those debts on your behalf. Though this can lead to hefty savings, it can also have a detrimental impact on your credit score.

Refinance your credit card debt with a debt consolidation loan

You can also refinance your credit card debt using another low-interest loan. For example, you could take out a home equity loan and use the money you receive to pay off your high-interest credit card debt. There are also debt consolidation personal loans that come with lower interest rates than credit cards alongside a fixed payment plan for faster payoff. However, it’s important to compare your options and seek the lowest interest rate possible when you consolidate your debts. 

Prioritize your payments

“One way to reduce the cost of this debt is to prioritize paying off higher interest cards first,” says Beckham. “This saves you money in the long run. However, a method called ‘the snowball method’ is kind of motivating — this involves paying off the credit card with the lowest balance first so you can feel some sense of accomplishment which might motivate you to keep going.”

The bottom line

Credit card debt is expensive in the long run. But, there are several approaches you can take to get out of it faster while paying significantly less in interest and finance charges in the process. “Whatever your approach, gear up for the long haul,” says Beckham. “Tackling debt of any size can be more of a marathon than a sprint, but with a goal in sight and a plan of action, you can reach the finish line.”



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Biden’s top hostage envoy Roger Carstens in Syria to ask for help in finding Austin Tice

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Roger Carstens, the Biden administration’s top official for freeing Americans held overseas, on Friday arrived in Damascus, Syria, for a high-risk mission: making the first known face-to-face contact with the caretaker government and asking for help finding missing American journalist Austin Tice

Tice was kidnapped in Syria 12 years ago during the civil war and brutal reign of now-deposed Syrian dictator Bashar al-Assad. For years, U.S. officials have said they do not know with certainty whether Tice is still alive, where he is being held or by whom.

The State Department’s top diplomat for the Middle East, Barbara Leaf, assistant secretary of state for Near Eastern Affairs, accompanied Carstens to Damascus as a gesture of broader outreach to Hay’at Tahrir al-Sham, known as HTS, the rebel group that recently overthrew Assad’s regime and is emerging as a leading power.

Near East Senior Adviser Daniel Rubinstein was also with the delegation. They are the first American diplomats to visit Damascus in over a decade, according to a State Department spokesperson. 

They plan to meet with HTS representatives to discuss transition principles endorsed by the U.S. and regional partners in Aqaba, Jordan, the spokesperson said. Secretary of State Antony Blinken traveled to Aqaba last week to meet with Middle East leaders and discuss the situation in Syria. 

While finding and freeing Tice and other American citizens who disappeared under the Assad regime is the ultimate goal, U.S. officials are downplaying expectations of a breakthrough on this trip. Multiple sources told CBS News that Carstens and Leaf’s intent is to convey U.S. interests to senior HTS leaders, and learn anything they can about Tice.

Rubinstein will lead the U.S. diplomacy in Syria, engaging directly with the Syrian people and key parties in Syria, the State Department spokesperson added. 

Diplomatic outreach to HTS comes in a volatile, war-torn region at an uncertain moment. Two sources even compared the potential danger to the expeditionary diplomacy practiced by the late U.S. Ambassador Christopher Stevens, who led outreach to rebels in Benghazi, Libya, in 2012 and was killed in a terrorist attack on a U.S. diplomatic compound and intelligence post.

U.S. special operations forces known as JSOC provided security for the delegation as they traveled by vehicle across the Jordanian border and on the road to Damascus. The convoy was given assurances by HTS that it would be granted safe passage while in Syria, but there remains a threat of attacks by other terrorist groups, including ISIS.

CBS News withheld publication of this story for security concerns at the State Department’s request. 

Sending high-level American diplomats to Damascus represents a significant step in reopening U.S.-Syria relations following the fall of the Assad regime less than two weeks ago. Operations at the U.S. embassy in Damascus have been suspended since 2012, shortly after the Assad regime brutally repressed an uprising that became a 14-year civil war and spawned 13 million Syrians to flee the country in one of the largest humanitarian disasters in the world.

The U.S. formally designated HTS, which had ties to al Qaeda, as a foreign terrorist organization in 2018. Its leader, Mohammed al Jolani, was designated as a terrorist by the US in 2013 and prior to that served time in a US prison in Iraq. 

Since toppling Assad, HTS has publicly signaled interest in a new more moderate trajectory. Al Jolani even shed his nom de guerre and now uses his legal name, Ahmed al-Sharaa. 

U.S. sanctions on HTS linked to those terrorist designations complicate outreach somewhat, but they haven’t prevented American officials from making direct contact with HTS at the direction of President Biden. Blinken recently confirmed that U.S. officials were in touch with HTS representatives prior to Carstens and Leaf’s visit.

“We’ve heard positive statements coming from Mr. Jolani, the leader of HTS,” Blinken told Bloomberg News on Thursday. “But what everyone is focused on is what’s actually happening on the ground, what are they doing? Are they working to build a transition in Syria that brings everyone in?”

In that same interview, Blinken also seemed to dangle the possibility that the U.S. could help lift sanctions on HTS and its leader imposed by the United Nations, if HTS builds what he called an inclusive nonsectarian government and eventually holds elections. The Biden administration is not expected to lift the U.S.  terrorist designation before the end of the president’s  term on January 20th.

Pentagon spokesperson Pat Ryder disclosed Thursday that the U.S. currently has approximately 2,000 US troops inside of Syria as part of the mission to defeat ISIS, a far higher number than the 900 troops the Biden administration had previously acknowledged. There are at least five U.S. military bases in the north and south of the country. 

The Biden administration is concerned that thousands of ISIS prisoners held at a camp known as al-Hol could be freed. It is currently guarded by the Syrian Democratic forces, Kurdish allies of the U.S. who are wary of the newly-powerful HTS. The situation on the ground is rapidly changing since Russia and Iran withdrew military support from the Assad regime, which has reset the balance of power. Turkey, which has been a sometimes problematic U.S. ally, has been a conduit to HTS and is emerging as a power broker.

A high-risk mission like this is unusual for the typically risk averse Biden administration, which has exercised consistently restrained diplomacy. Blinken approved Carstens and Leaf’s trip and relevant congressional leaders were briefed on it days ago.

“I think it’s important to have direct communication, it’s important to speak as clearly as possible, to listen, to make sure that we understand as best we can where they’re going and where they want to go,” Blinken said Thursday.

At a news conference in Moscow Thursday, Russian President Vladimir Putin said he had not yet met with Assad, who fled to Russia when his regime fell earlier this month. Putin added that he would ask Assad about Austin Tice when they do meet. 

Tice, a Marine Corps veteran, worked for multiple news organizations including CBS News.



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Mangione appears in court on federal murder charges after being extradited to New York; EPA’s efforts to tackle pollution in disadvantaged communities could be under threat

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Delivering Tomorrow: talabat’s Evolution in the Middle East

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From a startup to a transformative tech leader, discover how talabat champions innovation, sustainability, and community connections in the MENA region

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