CBS News
Does cooling inflation mean credit card debt will become cheaper soon?
Srdjan Pavlovic / Getty Images
If you have credit card debt that you carry from month to month, you may have noticed that your minimum payments are higher today than they were in the past — even if you’ve maintained a relatively static balance. Those higher payments are the result of higher interest rates.
Right now, the federal funds rate, which is the benchmark rate that consumer interest rates are based on — is paused at a 23-year high as the Federal Reserve tries to temper the ongoing issues with inflation. And, that means the interest rates on everything from personal loans to credit cards are elevated. But recent data shows that inflation is cooling, so will your credit card debt become cheaper soon?
Find out how a debt relief service can cut the cost of your debt today.
Does cooling inflation mean credit card debt will become cheaper soon?
So, will your credit card debt become cheaper now that inflation is cooling?
“Keeping inflation at the target 2% level is one of two mandates the Fed follows,” says Dan Casey, investment advisor and founder of Bridgeriver Advisors, a financial planning firm. “If inflation cools, the Fed will most likely lessen the current restrictive rate policy by decreasing the Fed Funds Rate. This should have a trickle-down effect causing other rates, such as credit cards, to decrease as well.”
That doesn’t mean substantial credit card interest rate reductions will happen soon, though. For starters, the current inflation rate is still higher than the Fed’s 2% target rate. And while it’s cooling, inflation was at 3.3% in May, according to the latest data. So, inflation may need to cool even further before the Fed cuts rates.
And, when the Federal Reserve does make cuts to its federal funds rate, it will likely do so in small increments. So, even if the Fed opts to slash rates soon, it could take a while for card rates to drop enough to result in substantial savings. So, if you need relief from high-interest credit card debt, waiting for rates to drop may not be the best plan. Luckily, there are other options you can pursue instead.
Don’t wait for rates to fall to get the relief you need.
Credit card debt relief options to consider now
If you’re trying to get relief from high-interest credit card debt, here are a few options to consider now:
- Credit card debt settlement: Credit card debt settlement companies may be able to settle your debts for less than you owe by negotiating a lump-sum payment that’s lower than your current credit card balance. Though this type of service can have a detrimental impact on your credit score, it can also result in significant savings.
- Credit card debt management: Debt management services may be able to negotiate lower interest rates on your behalf and help you more effectively manage your debts. This may be a good option if you’re able to make your minimum payments but are having a hard time paying off your full balance. And, while there may initially be a negative impact on your credit score due to potential account closures, your credit may improve as you make your payments over time.
- Credit card debt consolidation: With debt consolidation, you’ll take out a new loan to pay off your high-interest credit card debt. The new loan typically has a lower interest rate compared to your credit cards, which can reduce the cost of your debt.
The bottom line
If the Federal Reserve does cut rates in response to cooling inflation, it could reduce the cost of your credit card debt. However, there’s no guarantee that a rate cut will happen in the near future, and if it does, it could take a while for it to impact the cost of your credit card debt. If you need help with your credit card debt now, consider reaching out to a debt relief expert to discuss your options.
Watch CBS News
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.
NEW YORK — Drones have been banned from flying over several New Jersey towns, the Federal Aviation Administration confirms to CBS News.
The FAA order covers nearly two dozen towns, including Jersey City, Harrison, Edison, Bayonne and Camden. It will be in effect until Jan. 17.
The order says no unmanned aircraft can operate below 400 feet within one nautical mile of the airspace specified in each area. Additionally, it allows the government to use “deadly force” against the drones if they pose an “imminent security threat.”
“Pilots of aircraft that do not adhere to the procedures in the national security requirements for aircraft operations contained in this section may be intercepted, and/or detained and interviewed by federal, state, or local law enforcement or other government personnel,” the order reads in part.
Several of the zones are centered around infrastructure, like power substations. Others cover areas like the Kearny, New Jersey port and airspace around military installations like Joint Base McGuire-Dix-Lakehurst in South Jersey, or airports such as Newark-Liberty International Airport.
Earlier this month, the Florham Park, New Jersey police chief told residents drone sightings had been reported above “water reservoirs, electric transmission lines, rail stations, police departments, and military installations.”
Where are drones banned in New Jersey?
North Jersey:
- Cedar Grove
- Bridgewater
- North Brunswick
- Metuchen
- South Brunswick
- Edison
- Branchburg
- Sewaren
- Jersey City
- Harrison, Essex County
- Elizabeth
- Bayonne
- Clifton
- Kearny
Central Jersey:
South Jersey:
- Burlington
- Evesham
- Camden
- Gloucester City
- Westampton
- Winslow
- Hancocks Bridge, Salem County
See the full order from the FAA here.
Mysterious drones over New Jersey and beyond
Drones sightings have been reported all month long, first over Morris County, New Jersey and then over several other East Coast states.
Federal, state and local officials have been demanding more information about where they are coming from and what’s being done to stop them. The FBI is leading the investigation and tells CBS News it has received thousands of tips.
While the White House says there is no known threat, New Jersey Gov. Phil Murphy recently sent a letter to President Joe Biden asking for more federal resources.
On Wednesday, a push from Sen. Chuck Schumer to give local law enforcement more ways to track drones was blocked in the Senate.
Check back soon for the latest updates on this developing story.
contributed to this report.
Two highway crashes in southeastern Afghanistan killed a combined total of 50 people and injured 76, a government spokesman said Thursday.
One was a collision between a bus and an oil tanker on the Kabul-Kandahar highway late Wednesday, said Hafiz Omar, a spokesman for the governor of Ghazni province.
The other, also late Wednesday and in the same province, was in a different area of the same highway, which connects the Afghan capital with the south.
MOHAMMAD FAISAL NAWEED / AFP via Getty Images
Hamidullah Nisar, the provincial head of the Taliban-run Information and Culture Department, told the Reuters news agency the other accident involved a cargo truck, adding that some of those injured in both collisions were in critical condition.
Omar said many of the injured were taken to hospitals in Ghazni and patients in more serious condition were transferred to Kabul. Women and children were among the casualties, he said.
Authorities were in the process of handing over the bodies to families, Omar said.
MOHAMMAD FAISAL NAWEED / AFP via Getty Images
Crash survivor Abdullah Khan, who was being treated in a Ghazni hospital, said he didn’t know how many people had either died or were injured.
“I got out from the bus myself and heard the sound of moaning. There was blood everywhere. Some people had head injuries and others had hurt their legs.”
MOHAMMAD FAISAL NAWEED / AFP via Getty Images
Traffic accidents are common in Afghanistan, mainly due to poor road conditions and driver carelessness.
MOHAMMAD FAISAL NAWEED / AFP via Getty Images