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How To Consolidate Holiday Debt

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The holiday season is a time of celebration – and spending. In fact, 61 percent of consumers with credit card debt planned on adding to their balances this holiday season, according to a recent survey from Bankrate sister site CreditCards.com.

Unfortunately, anything borrowed eventually needs to be repaid, plus interest. When you charge holiday debt on a credit card with an average APR over 17 percent, paying down the principal of your balance isn’t easy.

Options for consolidating holiday debt

One smart strategy is to consolidate debt into a new loan with better terms. Most debt consolidation options can help you secure a lower interest rate, meaning you can pay a lower monthly payment each month and pay down debt faster.

These debt consolidation options can help you pay off holiday debt faster.

Debt consolidation loan

Debt consolidation loans are personal loans. They come with a fixed interest rate, a fixed monthly payment and a fixed repayment timeline that lets you know exactly when you’ll be debt-free. Personal loan rates range from about 5 percent to 36 percent, making them an affordable option for consumers who have good to great credit.

Pros:

  • Debt consolidation loans are easy to shop for and compare online. Some even let you get prequalified without a hard inquiry on your credit report.
  • These loans often come with low interest rates and no fees when you have good or excellent credit.
  • These loans offer a range of repayment terms, so you can find one that matches your needs.

Cons:

  • If you have bad credit, you will likely pay a higher interest rate.
  • Some personal loans come with origination fees that can equal up to 6 percent of your loan amount upfront.

Balance transfer credit card

A balance transfer credit card can help you dig your way out debt faster. Balance transfer credit cards offer 0 percent APR on transferred balances for up to 21 months, although some do charge a 3 or 5 percent balance transfer fee for the privilege.

Pros:

  • Paying down debt at 0 percent APR will help you chip away at the principal of your balance significantly faster.
  • Most 0 percent APR credit cards don’t charge an annual fee.
  • Many introductory offers last for 18 or 21 months, which could be enough time for you to pay off your debt entirely.

Cons:

  • Once your card’s introductory offer is over, your interest rate will reset to the standard variable rate.
  • Some cards charge a 3 to 5 percent balance transfer fee upfront.

Home equity loan or HELOC

If you have enough equity in your home, you can also borrow against your home’s value to consolidate debt. Home equity loans are similar to personal loans in that you get a fixed interest rate, a fixed monthly payment and a fixed repayment. However, you can also opt for a home equity line of credit, or HELOC, which is a line of credit you can borrow against in exchange for a variable APR.

Pros:

Cons:

  • Home equity loan products can come with pricey fees and closing costs similar to a home mortgage.
  • You’re using your home as collateral, meaning you could lose your property to foreclosure if you don’t repay your loan.

Borrow from your 401(k)

A 401(k) loan lets you borrow against your retirement savings, only to have your loan repaid through regular payroll deductions. 401(k) loans let you consolidate debt or pay for a major purchase without borrowing money from a third party bank or lender.

Pros:

  • You can borrow money from yourself instead of a bank or another lender.
  • You don’t have to rack up any more unsecured debt. 

Cons:

  • 401(k) loans are subject to limits, and you can typically only borrow up to 50 percent of your vested account balance.
  • If you leave your job, you may be required to repay your loan by the end of the tax year in order to avoid default and penalties.
  • Not all 401(k) plans allow loans, so make sure to check with your plan administrator.
  • When you borrow from your 401(k), you’re removing money that can be growing tax-free. The less money in your account, the less money that has the opportunity to grow over time.

Sign up for a debt management plan

Some credit counseling agencies offer debt management plans that can help you get back on track. These plans require you to deposit money into an escrow account each month, which the agency you’re working with uses to pay credit card bills and other debts you owe. The credit counseling agency will also try to negotiate lower interest rates on your behalf, which can help you pay less in interest and get out of debt faster.

Pros:

  • Working with a credit counselor may help you stay disciplined while you pay off holiday debt.
  • Having a third party negotiate interest rates on your behalf can help if you’re overwhelmed by the process.
  • Credit counseling agencies pay your bills on your behalf when you’re in a debt management plan, leaving you with only one monthly payment to make each month.

Cons:

  • Debt management plans typically are not free. You’ll usually pay $50 or more per month for the help you receive.
  • You’ll need to be aware of debt management and debt settlement scams since many shady companies operate in this space. Make sure companies you’re considering don’t charge any upfront fees for their help.

The bottom line

Racking up holiday debt is easy, but paying it off can take months or even years. If you have too much debt to handle, consolidating debt at a lower interest rate can help you pay less interest over time and pay off debt faster.

Just remember that none of the debt consolidation methods on this list will work if you keep using credit cards and adding to the pile. To get out of debt — and stay out — create a plan to pay it off and stop using your credit cards until you’re debt-free.

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Letter: Vote for Kiesha Preston | Letters

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The residents of Roanoke, Virginia, need to get out of the box of voting based on party affiliation. It’s time to vote for the best candidate to do the job.

Kiesha Preston is running as an independent and is the best choice for Roanoke City Council. When she was only three years old, she was troubled because a local Kroger store removed the kiddie carts. She asked me how to get them back so she could shop beside me. I told her to go to the manager and she did. She stated her case, and a few weeks later those kiddie carts were back in the store.

Kiesha also has presented a bill to Congress that was approved. The Virginia Domestic Violence Victims Protection Act prevents domestic violence victims from not being able to rent an apartment because of bad credit as a result of their abuser ruining their credit.

These are but two examples of Kiesha’s tenacity and getting results. We need people on council who have no agenda and are truly willing to work for the least of us.

Kiesha is not intimidated by those in power and will hold her own to help those who cannot help themselves. This is why she is the right person to get the job done.

Please do not be discouraged because you are tired of the same old same old where parties are concerned. You have another choice so please vote for Kiesha Preston. She has been working tirelessly on behalf of the people without being elected to an official office. Just imagine what she can do once she is officially on City Council.

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This One Credit Card Will Get You the Most Cash Back Right Now

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Let’s admit it, choosing the right credit card can be a stressful process. There are so many variables to consider—from annuals fees to credit score requirement—not to mention the various rewards and benefits each card offers, and how those align with your lifestyle and spending habits. Then there are those hidden fees and interest rates you have to reckon with. In other words, it takes a lot of work to make a truly informed decision when it comes to choosing a credit card that’s right for you. Perhaps a good cash back program is high on your credit card priority list because, well, who doesn’t like some extra money in their pocket?

To help you decide on the credit card that is going to get you the most cash back, the experts at personal finance site WalletHub compared more than 1,500 current credit card offers. From that large pool, they narrowed down the field to the cards that offer cash back rewards, comparing those offers based on initial bonuses, rewards earnings rates, annual fees, and more. From that analysis, here are the best credit cards that will get you the most cash back right now. And for more money matters, check out This Is the State Where Your Money Is Worth the Least.

8

Alliant Cashback Visa Signature Credit Card

Best for: Cash back on all purchases

Cash-back rate: 2.5 percent

Annual fee: $0.00 for the first year; $99.00 after that

What kind of credit you need to get one: Excellent

Learn more about the Alliant Cashback Visa Signature credit card here.

If you are worried about having buyer’s remorse after choosing a credit card, put that into perspective by checking out What You’re More Likely to Regret Than Anything Else You Do.

7

Discover It

Best for: People with bad credit

Cash-back rate: 1-2 percent

Annual fee: $0.00

What kind of credit you need to get one: Bad

Learn more about the Discover It credit card here.

6

U.S. Bank Cash+ Visa Signature Card

Best for: Cash bonus for good credit ($200.00)

Cash-back rate: 1-5 percent

Annual fee: $0.00

What kind of credit you need to get one: Good

Learn more about the U.S. Bank Cash+ Visa Signature Card here.

And to make sure you have money to pay off those monthly bills, avoid The Biggest Career Mistake You’ll Ever Make, According to Experts.

5

Chase Freedom Unlimited

Best for: No APR on purchases

Cash-back rate: 1.5-5 percent

Annual fee: $0.00

What kind of credit you need to get one: Good

Learn more about the Chase Freedom Unlimited credit card here.

And for more things that will help you and your family stay on the right financial track, check out The No. 1 Sign You Shouldn’t Buy That House, According to Realtors.

4

Capital One QuicksilverOne Cash Rewards Credit Card

Best for: People with limited-to-fair credit and looking for low annual fee

Cash-back rate: 1.5 percent

Annual fee: $39.00

What kind of credit you need to get one: Fair

Learn more about Capital One QuicksilverOne Cash Rewards Credit Card here.

3

Citi Double Cash Card—18 month BT offer

Best for: Flat-rate rewards

Cash-back rate: 2 percent

Annual fee: $0.00

What kind of credit you need to get one: Excellent

Learn more about the Citi Double Cash Card here.

2

Capital One Savor Cash Rewards Credit Card

Best for: Dining and entertainment

Cash-back rate: 1-4 percent

Annual fee: $95.00

What kind of credit you need to get one: Good

Learn more about the Capital One Savor Cash Rewards Credit Card here.

1

Blue Cash Preferred Card from American Express

Best for: Most cash back overall

Cash-back rate: 1-6 percent

Annual fee: $0.00 for the first year; $95.00 after that

What kind of credit you need to get one: Good

Learn more about Blue Cash Preferred Card from American Express here.

And for more helpful information delivered to your inbox, sign up for our daily newsletter.

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Possible Raises Series B and Moves Fully Remote | State

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SEATLLE, Oct. 20, 2020 /PRNewswire/ — Possible raises $11 million in new equity funding to expand the team and to provide additional products for its customers. Union Square Ventures led the round, with participation from existing investors Canvas Ventures, Unlock Venture Partners, Columbia Pacific Advisors, Union Bay Partners, Tom Williams, and FJ Labs. The company has also secured $80 million in new debt financing from Park Cities Advisors.

Furthermore, the company is now fully remote and recently onboarded software engineers from across the US and the globe. Possible is committed to distributed work and actively recruiting for a number of other remote roles.

Possible provides friendly access to capital and a simple way to build credit for people who otherwise would get a payday loan or get hit with a bank overdraft fee. The company uses real-time financial data, rather than a credit score, to qualify customers and provide funds instantly through its iTunes and Android apps. Unlike payday loans or overdraft fees, Possible loans are paid back in small installments over multiple pay periods to allow customers to catch their breath. By reporting on-time payments to the credit bureaus, Possible enables its customers to build credit history and eventually qualify for cheaper, longer term financial products. On average, customers with low credit scores see their scores increase by 70 points within 4 months.

Tony Huang, Possible’s CEO explains, “So many people who live paycheck to paycheck can’t afford to build credit history. We’re helping them do it for the first time while providing them with a friendlier and more affordable small-dollar loan.”

Since launching in June 2018, Possible’s given out loans to hundreds of thousands of customers, helping meet short-term cash needs while building credit history or establishing credit for the first time. These customers, often with bad credit or no credit history, are underserved by traditional banks. Possible fills that gap and provides financial access to those who need it most while giving them the means to climb their way out.

Gillian Munson, Partner at Union Square Ventures, explains the thesis behind their new investment, “Through tech innovation, data-driven insights, and a focus on the customer, Possible is well on its way to winning the hearts and minds of both consumers and regulators alike, and building a trusted brand that endures.”

A 2019 Experian study shows 34.8% of consumers are subprime and can’t access money when they need it. They pay $106 billion in punitive fees each year to the existing financial system for short-term credit products. These consumers are trapped in predatory debt cycles of payday loans and overdraft fees without the means to rebuild their credit or improve their financial health. While there has been a number of new tech-enabled products in this space, most lead to similar debt cycles and don’t address the harder issue of improving long-term financial health. That’s where Possible comes in.

Since the company is now fully remote, Possible is actively hiring talent across the globe. Tyler, Possible’s CTO, explains, “Being fully distributed allows us to access the talent pool of the entire world. Our success so far is a reflection of the quality of our people, and we believe hiring globally will allow us to find exceptional people to join us in achieving our mission.”

About Possible

Possible is a fintech company based in Seattle, Washington. The company provides a friendlier and easier way for customers to access capital while also building credit history and improving long-term financial health.

About Union Square Ventures

Union Square Ventures is a thesis-driven venture capital firm based in New York City. USV manages over $1 billion in capital across seven funds and focuses investments in portfolio companies with the potential to transform important markets.

About Park Cities Advisors LLC

Park Cities Advisors LLC (“PCA”) is a privately held, SEC-registered alternative credit manager based in Dallas, Texas. PCA is focused on private lending across the specialty finance and FinTech sectors and provides debt capital to companies across a variety of industries through asset-based financing transactions.

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