Business

‘It’s just gonna get paid when it gets paid’: Balance-carrying cardholders crunched by Fed rate hikes on August 2, 2023 at 10:00 am Business News | The Hill

Published

2 years ago

August 2, 2023

Americans with credit card debt are caught in the crossfire of the Federal Reserve’s battle to bring down inflation.

The average annual percentage rate (APR) for credit cards hit 22.39 percent during the second quarter of 2023, up 3.5 percentage points from the same period last year, according to a new study by WalletHub.

5 takeaways as the Fed reignites its inflation fight

“The current average credit card APR is the highest it’s ever been in the past two decades due to the recent Fed rate hikes,” WalletHub analyst Jill Gonzalez told The Hill.

Gonzalez anticipates credit card APR will increase further as a result of the Fed’s decision to raise interest rates again last week.

The Fed has hiked interest rates 11 times since March 2022, raising its baseline interest rate last week to a 22-year high. Fed rate hikes are meant to slow the economy and reduce inflation by making it more expensive to borrow and owe money.

While rates on some loans — such as mortgages — are only influenced by Fed hikes, credit card companies usually move rates in lockstep with the Fed.

Those higher rates are now deepening the debts many Americans are facing.

Caitlin Hogan, a 32-year-old case manager in central Kansas, told The Hill she had to put some unexpected expenses on one of her credit cards and is focused on paying off another one.

“I do not want to slip down the very slippery slope!” Hogan wrote.

Hogan’s plan is to put a little extra money towards that balance, but said “it’s just gonna get paid when it gets paid.”

Credit card debt on the rise

The national credit card balance is around $1 trillion, more cardholders are carrying a balance than ever before, and the average household carries $10,000 in credit card debt.

Riley Bookout, a graduate student at Texas A&M University, told The Hill he’s more cautious about what he puts on his credit card.

‘Don’t see the point of it’: Consumers feel the pinch as Fed raises rates again

“If I were to miss a payment — and I don’t make a ton of money — it could hurt,” Bookout said.

“I think it’s concerning that we’re having to raise the interest rate at all anymore,” he added. “From the outside, it feels like the economy’s doing rather well.”

Middle and low-income families were hardest hit by high inflation that made it difficult to afford basic needs including food, gas and housing, Gonzalez said. While inflation is far lower now than it was last year, the nation’s total credit card debt lays bare “the almost devastating effects of these increases.”

‘A long way to go‘ before rates come down

Inflation has plummeted from its peak at 9 percent year-over-year in June 2022 to 3 percent in June 2023, but Fed Chair Jerome Powell warned last week inflation has a “long way to go” before it falls to the Fed’s 2 percent inflation target.

Powell said the Fed may decide to raise interest rates again in September if inflation does not appear to be in check, and will likely keep rates high until it is quashed for good.

Powell: Housing market has ‘a ways to go’ before prices cool

“Inflation has proved repeatedly has proved stronger than we and other forecasters have expected and at some point that may change. We have to be ready to follow the data,” he said.

Gonzalez expects more hikes before the end of the year as the Fed works to cool the economy, and she anticipates credit card debt and the unemployment rate will continue to climb over the next few months.

“There’s still uncertainty about whether we’ll face a recession in the second half of the year or not, but it’s important for consumers to start saving up regardless,” Gonzalez said.

How to manage credit card debt

While it can be difficult to save when the interest keeps piling up, Candace Lee, vice president and client advisor at Glassman Wealth Services, said there are several options for tackling higher credit card debt.

“Anytime there’s excess cash that you have in your bank account, just focus on paying down the one that has the highest interest rate,” Lee said. “You’re basically just placing money in interest rate fees every time you kind of just leave that one to build.”

Cardholders may also focus on paying off the credit card with the highest balance, or a smaller balance that’s easy to pay off “so you kind of feel like you’re making progress.”

Lee does not usually recommend her clients to refinance their credit card debt. She said there may be fine print that’s missed that could make it even harder to pay down their debt.

If possible, it’s important to make the minimum payments on credit card — and to make them on time — to avoid hits to your credit score and late fees.

Lee says in the immediate term, she tries to be as encouraging as she can when working with clients who are struggling with credit card debt.

“Some people can’t help having credit card debt just based on their income,” she said.

Lee added that getting into the habit of evaluating your accounts, expenses and income as you have extra cash to pay off credit card debt “is just a smart strategy.”

Tackling late fees

The Consumer Financial Protection Bureau (CFPB) proposed a new rule in February to cap credit card late fees it estimates cost Americans around $12 billion each year.

If the proposed rule is finalized, late fees would drop from as much as $41 per violation to $8, among other provisions.

The CFPB estimates this rule would reduce late fees by as much as $9 billion annually, but banks and credit unions are lining up against the proposal.

In a May letter to the CFPB, the American Bankers Association, the Consumer Bankers Association and the National Association of Federally-Insured Credit Unions warned credit cards could get more expensive and difficult to get if the rule were implemented.

The associations also argued late fees are an “important incentive” to encourage on-time payments, minimize the risk of default and support good credit.

Business Americans with credit card debt are caught in the crossfire of the Federal Reserve’s battle to bring down inflation. The average annual percentage rate (APR) for credit cards hit 22.39 percent during the second quarter of 2023, up 3.5 percentage points from the same period last year, according to a new study by WalletHub. 5…

Business

When TikTok and CapCut Vanished from America

Published

3 weeks ago

January 19, 2025

Bolanle Media Staff

In a shocking turn of events, TikTok and CapCut, two of America’s most popular social media and video editing apps, vanished from U.S. app stores and became inaccessible to users on Saturday evening, January 18, 2025. This unprecedented digital blackout affected approximately 170 million American users, leaving them stunned and searching for alternatives.

The Sudden Shutdown

As the clock struck 10:50 PM Eastern Time on Saturday, both TikTok and CapCut disappeared from Apple and Google app stores. Users attempting to access the apps were greeted with a stark message: “Sorry, TikTok isn’t available now. A law banning TikTok has been enacted in the U.S. Unfortunately, that means you can’t use TikTok for now”.

The ban wasn’t limited to just TikTok and CapCut. Other ByteDance-owned apps, including Lemon8, Hypic, and Gauth, also became unavailable to U.S. users. This sweeping action effectively cut off access to a suite of popular digital tools that millions had come to rely on for entertainment, content creation, and even business purposes.

The Legal Battle

The shutdown came after a tumultuous legal battle that culminated in a Supreme Court decision upholding a federal law requiring ByteDance, the Chinese parent company of TikTok and CapCut, to either sell its U.S. operations or face a ban. The legislation, passed in April 2024, cited national security concerns related to data privacy and potential foreign influence.

Impact on Users and Creators

The sudden disappearance of TikTok and CapCut has left content creators and everyday users in a state of digital limbo. Many relied on these platforms not just for entertainment, but as essential tools for their livelihoods and creative expression. The ban has disrupted a thriving ecosystem of digital content creation, leaving millions to scramble for alternative platforms and editing tools.

Political Implications and Future Uncertainties

As the dust settles, all eyes are on the incoming administration. President-elect Donald Trump, set to take office on January 20, has hinted at a potential 90-day extension for ByteDance to sell TikTok. This development has injected a new layer of uncertainty into an already complex situation.

What’s Next?

While the apps remain inaccessible, ByteDance and TikTok officials continue to work towards a resolution. TikTok’s message to users ends on a hopeful note, stating, “We are fortunate that President Trump has indicated that he will work with us on a solution to reinstate TikTok once he takes office. Please stay tuned”.

As America grapples with this digital void, questions about data privacy, national security, and the future of social media regulation loom large. The TikTok and CapCut ban marks a significant moment in the ongoing debate over the influence of foreign-owned technology companies in the United States, with far-reaching implications for users, creators, and the tech industry as a whole.

Bolanle Media covers a wide range of topics, including film, technology, and culture. Our team creates easy-to-understand articles and news pieces that keep readers informed about the latest trends and events. If you’re looking for press coverage or want to share your story with a wider audience, we’d love to hear from you! Contact us today to discuss how we can help bring your news to life.

Business

TikTok Ban Drives 216% Rise in U.S. Users Learning Chinese on Duolingo

Published

3 weeks ago

January 16, 2025

Bolanle Media Staff

Duolingo has reported a remarkable 216% increase in U.S. users learning Mandarin Chinese, coinciding with the impending ban on TikTok, set to take effect on January 19, 2025. This surge is attributed to many TikTok users migrating to a new Chinese social media platform called RedNote (also known as Xiaohongshu), which defaults to Mandarin as its primary language. As TikTok users seek alternatives amidst concerns over data privacy and app availability, they are turning to RedNote, prompting a cultural exchange that has driven interest in learning Chinese.

The spike in Mandarin learners began around mid-January, aligning with the growing popularity of RedNote among former TikTok users. Duolingo’s marketing team has actively engaged with this trend on social media, humorously acknowledging the phenomenon with posts like “Learning Mandarin out of spite? You’re not alone”.

Additionally, Duolingo has seen a 36% increase in downloads in the U.S., reflecting heightened consumer demand for language learning resources as users adapt to the new social media landscape.

The transition from TikTok to RedNote has not been without challenges, as some users have encountered technical issues during registration and account suspensions.

Nevertheless, this shift underscores a significant demand for social networking experiences that resonate with American users while navigating the complexities of Chinese platforms.

Business

TikTok’s Final Countdown: The Sunday Shutdown

Published

3 weeks ago

January 16, 2025

Bolanle Media Staff

As the clock ticks down to January 19, 2025, TikTok users in the United States are bracing for a significant disruption. The app, which boasts approximately 170 million users in the country, faces a potential ban that could render it non-functional by this Sunday. Here’s what you need to know about the impending ban and its implications.

Key Details of the Ban

The anticipated ban comes amid ongoing national security concerns regarding TikTok’s Chinese ownership. Government officials have raised alarms about the possibility of sensitive user data being accessed by Chinese authorities. As a result, the app is expected to be removed from digital app stores, effectively cutting off new downloads and updates.

What Will Happen?

Removal from App Stores: On January 19, TikTok will likely be taken down from platforms like the Apple App Store and Google Play Store.
Existing Users Affected: Current users may find that their app becomes non-functional, losing access to new content creation and updates.
Data Preservation Challenges: Users may face difficulties in preserving their data and content as the deadline approaches.

Recommendations for Users

In light of the impending ban, TikTok users should take proactive steps to safeguard their content and data:

Download Personal Data: Users can access their TikTok settings to download their data before it’s too late.
Export Saved Videos: Save any cherished videos or content that you wish to keep.
Backup Content: Consider backing up your videos on alternative platforms.
Explore Alternatives: As TikTok faces its potential shutdown, consider migrating to other platforms such as:

Instagram Reels
YouTube Shorts
Lemon8
Triller

Potential Scenarios

While the ban is set for this Sunday, there are several scenarios that could unfold in the coming days:

Last-Minute Legal Intervention: There remains a possibility of a legal challenge that could delay or halt the ban.
Temporary Injunction: Courts may issue a temporary injunction allowing TikTok to operate while legal proceedings continue.
Complete Shutdown: If no intervention occurs, users will face a complete shutdown of the platform in the U.S. market.

Emotional Impact on Users

The potential ban is not just a technical disruption; it carries significant emotional weight for many users. Content creators who have built their brands on TikTok may experience economic repercussions as they lose a primary platform for engagement. Additionally, the shift could lead to broader changes in the social media landscape as users seek new avenues for expression and connection.

Conclusion

As we approach this critical deadline, TikTok users should remain vigilant and prepared for possible changes. Whether through legal maneuvers or a complete shutdown, the future of TikTok in the United States hangs in the balance. Stay tuned for real-time updates as we navigate this evolving situation together.