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Is a balance transfer or debt consolidation better right now? Experts weigh in

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There are benefits to both debt relief options right now — but one may work better than the other in today’s economic climate.

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The economic squeeze is pushing more people into credit card debt. For 52.97% of Americans, housing costs now take over half their monthly salaries — leaving less for other crucial expenses. “There’s an increasing gap between what life costs and what people can earn in their jobs,” says Bobbi Rebell, certified financial planner and author at CardRates.com.

This trend is reflected in recent data. About 83% of Americans say they prioritize paying off credit cards this year, while 22% have missed a payment in the last six months. These statistics highlight the growing need for debt assistance.

If you need debt relief to improve your finances, you have options such as balance transfers and debt consolidation loans. But which is best right now? Here’s what experts say to make the right choice for your situation.

Need more help with your debt? Compare your top debt relief options now.

Is a balance transfer or debt consolidation better right now? Experts weigh in

“Balance transfers are ideal if you have good credit and can qualify for 0% introductory offers,” says Mel Abraham, money mentor and bestselling author of Building Your Money Machine

These offers pause interest accumulation as you pay down your balance. On the other hand, debt consolidation through a personal loan might be better if you have multiple debts on high-interest credit cards and want to simplify payments.

When a balance transfer could make sense

To help you understand when a balance transfer could be beneficial, Abraham shares this scenario:

Imagine you have $15,000 in credit card debt spread across four cards, with an average interest rate of 22%. You’re considering a balance transfer to a card with a 0% annual percentage rate (APR) for 18 months and a 3% transfer fee.

Here’s the breakdown:

  • Transfer fee: $450 (3% of $15,000)

  • Monthly payment to clear the balance: Approximately $861 (divide the total amount by 18 months to avoid interest)

  • Total paid over 18 months: $15,450 ($15,000 + $450 fee)

In this case, you’d save all the interest you would’ve paid at 22% APR, minus the $450 transfer fee. But you’d need to commit to high monthly payments of $861 to clear the balance before the promotional period ends.

This scenario shows the key pros and cons of balance transfers:

Pros

Cons

All payments reduce your principal balance

Balance transfer fees apply (often 3% to 5% of the transferred amount)

No interest charges during the promotional period

High APR may be possible if not paid off during the promotional period

Combines multiple debts into one account

High monthly payments to clear the balance quickly

Takeaway: A balance transfer can save you money if you can afford higher monthly payments and pay off debt within the promotional period.

Find out how the right debt relief strategy could help you today.

When debt consolidation could make sense

Now, let’s look at another scenario from Abraham to see when debt consolidation could be smart.

Imagine you have the same $15,000 in credit card debt across four cards, with an average interest rate of 22%. But instead of a balance transfer, you’re considering a debt consolidation loan with a 7% interest rate over 5 years.

Here’s the breakdown:

  • Loan amount: $15,000

  • Interest rate: 7%

  • Loan term: 5 years

  • Monthly payment: Approximately $297

  • Total paid over 5 years: Approximately $17,820 ($297 x 60 months)

In this case, you’d pay more overall due to interest, but your monthly payments would be much lower than with a bank transfer — and more manageable for your budget.

This scenario shows the key pros and cons of debt consolidation:

Pros

Cons

Consolidates multiple debts into one simple payment

Interest accrues over the loan term, increasing the total cost of paying off the original debt

Fixed interest rate and clear payoff date

Longer repayment period

Lower monthly payment (compared to the aggressive repayment plan with a 0% balance transfer)

Takeaway: Debt consolidation can be wise if you need lower monthly payments and more time to pay off your debt. However, the total interest paid could be higher due to the extended repayment period.

The bottom line

When choosing between a balance transfer and debt consolidation, think about your timeline and credit score. “Balance transfers are relatively inexpensive but short-term — usually 18 months or less. Then, the rate goes back up to the market rate,” says Kelly Johnson, senior vice president of commercial banking at Sonata Bank.

Protecting your credit should be your top priority when tackling debt. Johnson advises not waiting until all your cards are maxed out and you’re struggling with payments. “[This] will negatively affect your credit score, limiting [your options],” he said.

If you’re leaning toward a debt consolidation loan, prepare for a thorough review process. According to Johnson, you can expect lenders to examine your credit history, verify your income and evaluate your ability to manage monthly payments.

Finally, don’t forget to look into other financial debt relief strategies such as earning extra income from a flexible part-time job or seeking debt settlement or credit counseling.



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After Tyre Nichols’ fatal beating, Memphis officer texted photo of bloodied man to ex-girlfriend, she testifies

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A former Memphis police officer charged in the fatal beating of Tyre Nichols sent his ex-girlfriend a photo of the badly injured man on the night he was punched, kicked and hit with a police baton following a traffic stop, according to trial testimony Wednesday.

Brittany Leake, a Memphis officer and Demetrius Haley’s former girlfriend, testified during the criminal trial that she was on the phone with Haley when officers pulled Nichols over for a traffic stop. She said she heard a “commotion,” including verbal orders for someone to give officers his hands.

The call ended, but Haley later texted the photo in a group chat comprising Haley, Leake and her godsister, she testified. Prosecutors displayed the photo for the jury. It showed Nichols with his eyes closed, on the ground with what appeared to be blood near his mouth and his hands behind his back.

Leake said that when she saw the photo, her reaction was: “Oh my God, he definitely needs to go to the Med.”

The Med is shorthand for Memphis’ trauma hospital.

The fatal beating, caught on police bodycams and street surveillance cameras, has sparked protests and calls for police reform. Officers said they pulled over Nichols for reckless driving, but Memphis’ police chief said there was no evidence to substantiate that claim.

Haley, Tadarrius Bean and Justin Smith are on trial after pleading not guilty to charges that they deprived Nichols of his civil rights through excessive force and failure to intervene, and obstructed justice through witness tampering. Their trial began Sept. 9 and is expected to run three to four weeks. 

Tyre Nichols
Former Memphis police officer Demetrius Haley arrives at the federal courthouse for the second day of jury selection for the trial in the Tyre Nichols case Tuesday, Sept. 10, 2024, in Memphis, Tenn.

George Walker IV / AP


The Memphis Police Department fired the three men, along with Emmitt Martin III and Desmond Mills Jr., after Nichols’ death. The beating was caught on police video, which was released publicly. The officers were later indicted on the federal charges. Martin and Mills have taken plea deals.

During her testimony Wednesday, Leake said she deleted the photo after she saw it and that sending such a photo is against police policy.

“I wasn’t offended, but it was difficult to look at,” she said.

Leake said Haley had sent her photos before of drugs, and of a person who had been injured in a car accident.

Earlier Wednesday, Martin was on the witness stand for a third day. Defense attorneys tried to show inconsistencies between Martin’s statements to investigators and his court testimony. Martin acknowledged lying about what happened to Memphis Police Department internal investigators, to try to cover up and “justify what I did.”

But Martin said he told the truth to FBI investigators after he pleaded guilty in August, including statements about feeling pressure on his duty belt where his gun was located during the traffic stop, but not being able to see if Nichols was trying to get his gun. Martin has testified that he said “let go of my gun” during the traffic stop.

Martin Zummach, the attorney for Justin Smith, asked Martin if he knew of any reasons why Nichols did not simply say, “I give up.”

“He’s out of it,” Martin said. “Disoriented.”

Martin testified that the situation escalated quickly when Haley pulled his gun and violently yanked Nichols from his car, using expletives and failing to tell Nichols why he had been pulled over and removed from the vehicle.

“He never got a chance to comply,” Martin said.

Nichols, who was Black, was pepper sprayed and hit with a stun gun during the traffic stop, but ran away, police video shows. The five officers, who also are Black, then beat him about a block from his home, as he called out for his mother.

Video shows the officers milling about and talking as Nichols struggled with his injuries. Nichols died Jan. 10, 2023, three days after the beating.

An autopsy report shows Nichols – the father of a boy who is now 7 – died from blows to the head. The report describes brain injuries, and cuts and bruises on his head and elsewhere on his body.

Jesse Guy testified that he was working as a paramedic for the Memphis Fire Department the night of the beating. He arrived at the location after two emergency medical technicians, Robert Long and JaMichael Sandridge.

Guy said he was not told about the medical problems Nichols had experienced before he arrived, and that Nichols was injured, seated on the ground and unresponsive.

Nichols had no pulse and was not breathing, and it “felt like he was lifeless,” Guy said.

In the ambulance, Guy performed CPR and provided mechanical ventilation, and Nichols had a pulse by the time he arrived at the hospital, the paramedic said.

Guy said Long and Sandridge did not say if they had checked Nichols’ pulse and heart rate, and they did not report if they had given him oxygen. When asked by one of Bean’s lawyers whether that information would have been helpful in treating Nichols, Guy said yes.

Long and Sandridge were fired for violating fire department policies after Nichols died. They have not been criminally charged.

The five officers also have been charged with second-degree murder in state court, where they pleaded not guilty. Mills and Martin are expected to change their pleas.

Federal prosecutors have previously recommended a 40-year sentence for Martin. A date has not been set in state court yet.

Nichols worked for FedEx, and he enjoyed skateboarding and photography. The city of Sacramento, where Nichols grew up, named a skatepark in his honor. “Tyre fell in love with skateboarding at a young age and it wasn’t long before it became a part of his lifestyle,” states the resolution approved by the city council. He had a tattoo of his mother’s name.

“Tyre Nichols’ family have been praying for justice and accountability from the very beginning of this tragedy,” Ben Crump and Antonio Romanucci, the civil rights attorneys representing Nichols’ family, said in a statement when the trial began. 



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Boeing set to start large-scale furloughs due to machinists strike

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Boeing’s CEO said Wednesday that the company will begin furloughing “a large number” of employees to conserve cash during the strike by union machinists that began last week.

Chief Executive Kelly Ortberg said the people who would be required to take time off without pay starting in coming days include executives, managers and other employees based in the U.S.

“While this is a tough decision that impacts everybody, it is in an effort to preserve our long-term future and help us navigate through this very difficult time,” Ortberg said in a company-wide message to staff.

Boeing didn’t say how many people will face rolling furloughs, but the number is expected to run into the tens of thousands. The aerospace giant had 171,000 employees at the start of the year.

About 33,000 Boeing factory workers in the Pacific Northwest began a strike Friday after rejecting a proposal to raise pay by 25% over four years. They want raises of at least 40%, the return of a traditional pension plan and other improvements in the contract offer they voted down.

Boeing's Seattle Workers Walk Out In First Strike Since 2008
Workers picket outside a Boeing in Everett, Washington, on  Sept. 16, 2024. 

Scott Brauer / Bloomberg via Getty Images


The strike is halting production of several airplane models including Boeing’s best-selling plane, the 737 Max. The company gets more than half of the purchase price when new planes are delivered to buyers, so the strike will quickly hurt Boeing’s cash flow.

Ortberg said selected employees will be furloughed for one week every four weeks while retaining their benefits. The CEO and other senior executives will take pay cuts during the duration of the strike, he said, without stating how deep the cuts will be.

All work related to safety, quality, customer support and certification of new planes will continue during the furloughs, he said, including production of 787 Dreamliner jets, which are built by nonunion workers in South Carolina.

Ortberg said in a memo to employees that the company is talking to the International Association of Machinists and Aerospace Workers about a new contract agreement that could be ratified.

“However, with production paused across many key programs in the Pacific Northwest, our business faces substantial challenges and it is important that we take difficult steps to preserve cash and ensure that Boeing is able to successfully recover,” he said.

Boeing’s chief financial officer warned employees earlier this week that temporary layoffs were possible.

The company, which is based in Arlington, Virginia, but has most of its commercial-airplanes business located in the Pacific Northwest, is also cutting spending on suppliers, freezing hiring and eliminating most travel.

Despite two full days of talks assisted by the Federal Mediation and Conciliation Service, the union said Wednesday that no resolution had been reached and no additional negotiations were scheduled, according to CBS Seattle affiliate KIRO-TV.

Striking workers are picketing at several locations in the Seattle area, Oregon and California. The union, which recommended the offer that members later rejected by a 96% vote, is surveying the workers to learn what they want in a new contract. The union’s last strike at Boeing, in 2008, lasted about two months.

If the walkout doesn’t end soon, Boeing’s credit rating could be downgraded to non-investment or junk status, which would make borrowing more expensive. Shortly after the walkout began Friday, Moody’s put Boeing on review for a possible downgrade, and Fitch said a strike longer than two weeks would make a downgrade more likely.



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A Moment With: Viswa Colluru

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A Moment With: Viswa Colluru – CBS News


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Enveda Biosciences CEO and Founder Viswa Colluru shares his journey to delivering hope through new medicines

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