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Some Gen Z credit card users are maxed out: 5 debt relief options to consider
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Credit card debt is an ongoing issue for many Americans, and under the weight of today’s economic challenges, these types of issues are compounding. For example, about one in seven (or 15.3%) of Gen Z credit card users have maxed out their credit cards, according to recent research from the New York Fed. But it’s not just Gen Z that is struggling. Almost one in five credit card users overall are maxed out, and nearly 9% of credit card debts were considered delinquent in Q1 2024.
These credit card statistics are indicative of the significant economic challenges many people are facing in an increasingly expensive world, one of which is persistently high inflation. While inflation is down from the over-9% levels that occurred in mid-2022, today’s 3.4% inflation rate is still too high, and prices for essentials like food, rent and gas remain elevated. Further compounding the issue are the elevated interest rates meant to combat inflation, which directly increases the cost of carrying a credit card balance from month to month.
As these everyday expenses mount, more and more people find themselves forced to rely on credit to make ends meet, inadvertently falling into a deepening cycle of debt. And, given the severity of the situation, many maxed-out borrowers are now looking for strategies to escape the burden of overwhelming credit card debt.
Learn more about how the right debt relief company can help you now.
5 debt relief options to consider
There are numerous potential debt relief options available to you if you’re dealing with maxed-out credit cards, including:
Debt consolidation loans
One approach that may be worth considering is to take out a debt consolidation loan from a bank, credit union or online lender. With this method, you use the debt consolidation loan to pay off all of your existing credit card balances. This consolidates multiple credit card payments into a single fixed monthly payment that goes toward paying off the new loan, ideally at a lower interest rate than your credit cards had.
By consolidating multiple credit card balances into one loan, your total interest costs are reduced over the repayment period. This makes the debt cheaper and easier to pay off what you owe each month. Having a single payment can also make your debt payments easier to budget for.
Compare your debt relief options and get started today.
Debt consolidation programs
A debt consolidation program works similarly to a debt consolidation loan, but rather than borrowing through a traditional financial institution, you work with a debt relief company to obtain a debt consolidation loan instead. With these programs, you typically borrow money from the debt relief company’s lender partner to bundle your credit card debts into a single streamlined payment.
By taking out a debt consolidation loan through a debt consolidation program, you’ll typically get a lower interest rate compared to your credit cards. In turn, the total interest costs are reduced over the repayment period. This makes your debt easier, and often cheaper, to pay off over time.
Debt management plans
When you enroll in a debt management plan with a debt relief company, the experts you work with negotiate concessions like reduced interest, waived fees and combined payment schedules with your creditors. You then make a single payment to the agency each month, which then distributes that payment among your creditors. This creates a structured, closed-end repayment plan designed to be affordable for your situation. In many cases, it also makes it possible to pay off the total debt you owe in three to five years (on average).
Debt settlement
Debt settlement programs are typically offered by debt relief companies and the goal of these programs is to settle your debt for less than the total balance owed. When you enroll in a debt settlement or debt forgiveness program, you generally stop making payments to creditors and send monthly payments to the debt relief agency instead. These payments are held in an account, and once a significant amount has accumulated, the debt relief experts will attempt to negotiate lump-sum settlements with each creditor for a fraction of what is owed.
However, it can also have severely negative credit impacts on your credit, both during the settlement process and after, as the late payments will affect your credit score — and the debts will show that they were settled for less than owed on your credit report. Still, for those who can’t afford their minimum payments, this option provides a path out of debt in an expedited time frame.
Balance transfer credit cards
If you have decent credit, you may be able to open a new balance transfer credit card, which allows you to transfer existing high-interest balances to a new card with an introductory 0% APR period. This interest-free window provides breathing room to pay down principals before regular interest rates kick in, but you’ll have to be disciplined about your payments to ensure that you pay it all off during the interest-free (or low interest) window.
The bottom line
Right now, millions of Americans are struggling under the weight of maxed-out credit card balances. If you’re one of them, you can get help, whether that’s opting for debt settlement, consolidating your debt, enrolling in a debt management program or using a balance transfer card to cut down on the interest charges temporarily. But no matter which route you take, today’s economic headwinds make it important for you and others facing mounting credit card balances to be proactive and explore your debt relief options in order to find firmer financial footing.
Legislation to expand Social Security benefits to millions of Americans passed the U.S. Senate early Saturday and is now headed to the desk of President Joe Biden, who is expected to sign the measure into law.
Senators voted 76-20 for the Social Security Fairness Act, which would eliminate two federal policies that prevent nearly 3 million people, including police officers, firefighters, postal workers, teachers and others with a public pension, from collecting their full Social Security benefits. The legislation has been decades in the making, as the Senate held its first hearings into the policies in 2003.
“The Senate finally corrects a 50-year mistake,” proclaimed Senate Majority Leader Chuck Schumer, a Democrat from New York, after senators approved the legislation at 12:15 a.m. Saturday.
The bill’s passage is “a monumental victory for millions of public service workers who have been denied the full benefits they’ve rightfully earned,” said Shannon Benton, executive director for the Senior Citizens League, which advocates for retirees and which has long pushed for the expansion of Social Security benefits. “This legislation finally restores fairness to the system and ensures the hard work of teachers, first responders and countless public employees is truly recognized.”
The vote came down to the wire, as the Senate looked to wrap up its current session. Senators rejected four amendments and a budgetary point of order late Friday night that would have derailed the measure, given the small window of time left to pass it.
Vice President-elect JD Vance of Ohio was among the 24 Republican senators to join 49 Democrats to advance the measure in an initial procedural vote that took place Wednesday.
“Social Security is a bedrock of our middle class. You pay into it for 40 quarters, you earned it, it should be there when you retire,” Ohio Senator Sherrod Brown, a Democrat who lost his seat in the November election, told the chamber ahead of Wednesday’s vote. “All these workers are asking for is for what they earned.”
What is the Social Security Fairness Act?
The Social Security Fairness Act would repeal two federal policies — the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) — that reduce Social Security payments to nearly 3 million retirees.
That includes those who also collect pensions from state and federal jobs that aren’t covered by Social Security, including teachers, police officers and U.S. postal workers. The bill would also end a second provision that reduces Social Security benefits for those workers’ surviving spouses and family members. The WEP impacts about 2 million Social Security beneficiaries and the GPO nearly 800,000 retirees.
The measure, which passed the House in November, had 62 cosponsors when it was introduced in the Senate last year. Yet the bill’s bipartisan support eroded in recent days, with some Republican lawmakers voicing doubts due to its cost. According to the Congressional Budget Office, the proposed legislation would add a projected $195 billion to federal deficits over a decade.
Without Senate approval, the bill’s fate would have ended with the current session of Congress and would have needed to be re-introduced in the next Congress.
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Saturday is the winter solstice and 2024’s shortest day. Here’s what to know about the official start of winter.
The 2024 winter solstice, the shortest day of the year, happens on Saturday, Dec. 21, in the Northern Hemisphere. The celestial event signifies the first day of winter, astronomically.
What is the winter solstice?
The winter solstice is the day each year that has the shortest period of daylight between sunrise and sunset, and therefore the longest night. It happens when the sun is directly above the Tropic of Capricorn, a line of latitude that circles the globe south of the equator, the National Weather Service explains.
The farther north you are, the shorter the day will be, and in the Arctic Circle, the sun won’t rise at all.
How is the day of the winter solstice determined?
The winter solstice occurs because of the Earth’s tilt as it rotates around the sun.
When the Northern Hemisphere tilts away from the sun, the nights last longer. The longest night happens on the solstice because the hemisphere is in its furthest position from the sun. That occurs each year on Dec. 21 or 22.
This year, it falls on Dec. 21 at 4:21 a.m ET, to be precise.
On the summer solstice, when the northern tilt is closest to the sun, we have the longest day, usually June 20 or 21.
National Weather Service
The solstices are not always exactly on the 21st every year because the earth’s rotation around the sun is 365.25 days, instead of 365 even.
Will days start getting longer after the winter solstice?
Yes. Each day after the solstice, we get one minute more of sunlight. It doesn’t sound like much, but after just two months, or around 60 days, we’ll be seeing about an hour more of sunlight.
When will winter officially be over in 2025?
The meteorological winter ends on March 20, 2025. Then, spring will last until June 20, when the summer solstice arrives.
How is the winter solstice celebrated around the world?
Nations and cultures around the world have celebrated the solstice since ancient times with varying rituals and traditions. The influence of those solstice traditions can still be seen in our celebrations of holidays like Christmas and Hanukkah, Britannica notes.
The ancient Roman Saturnalia festival celebrated the end of the planting season and has close ties with modern-day Christmas. It honored Saturn, the god of harvest and farming. The multiple-day affair had lots of food, games and celebrations. Presents were given to children and the poor, and slaves were allowed to stop working.
Gatherings are held every year at Stonehenge, a monumental circle of massive stones in England that dates back about 5,000 years. The origins of Stonehenge are shrouded in mystery, but it was built to align with the sun on solstice days.
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The Hopi, a Native American tribe in the northern Arizona area, celebrate the winter solstice with dancing, purification and sometimes gift-giving. A sacred ritual known as the Soyal Ceremony marks the annual milestone.
In Peru, people honor the return of the sun god on the winter solstice. The ancient tradition would be to hold sacrificial ceremonies, but today, people hold mock sacrifices to celebrate. Because Peru is in the Southern Hemisphere, their winter solstice happens in June, when the Northern Hemisphere is marking its summer solstice.
Scandinavia celebrates St. Lucia’s Day, a festival of lights.
The “arrival of winter,” or Dong Zhi, is a Chinese festival where family gathers to celebrate the year so far. Traditional foods include tang yuan, sweet rice balls with a black sesame filling. It’s believed to have its origins in post-harvest celebrations.
Researchers stationed in in Antarctica even have their own traditions, which may include an icy plunge into the polar waters. They celebrate “midwinter” with festive meals, movies and sometimes homemade gifts.