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The Biden administration recently announced it would look to forgive the student debt of borrowers experiencing “financial hardship.”
It is still uncertain who might be eligible, but there are clues from the U.S. Department of Education and in other programs that aim to help the same group of borrowers.

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The Biden administration recently announced it would look to forgive the student debt of borrowers experiencing “financial hardship.”
So, who might be eligible?

It’s still uncertain, but there are clues from the U.S. Department of Education and in other programs that aim to help the same group of borrowers.
Since the Supreme Court struck down President Joe Biden’s original plan to cancel up to $400 billion in student debt, his administration has tried to rework its relief package to make it legally viable. To do so, it has sought to narrow the aid by focusing on certain groups, including those with balances greater than what they originally borrowed and students from schools of questionable quality.
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The U.S. Department of Education now says it will hold an additional rulemaking session on its “Plan B” for student loan forgiveness on Feb. 22 and 23, during which the negotiators will focus exclusively on financially strapped borrowers.
That category may be challenging to define.

But the department is looking for ways for people to get their debt forgiven based on hardship that remains after other benefits are exhausted, according to a source familiar with its plans.
Here’s who might be eligible.

Bankruptcy eligibility could be a guide

The Education Department has signaled that it could turn to the standard for the discharge of student loans in bankruptcy for guidance in how it defines those eligible for forgiveness under the hardship provision.

To walk away from their student debt in bankruptcy, borrowers typically have to prove “undue hardship,” which contains three factors: 1) an inability to maintain a minimal standard of living, 2) an unlikeliness to see their financial situation change and, 3) a record of good faith efforts to repay their loans.
“These standards may be informative of the considerations other policymakers have used to identify hardship,” the department wrote in a recent issue paper.
Few borrowers are likely to meet these requirements, said higher education expert Mark Kantrowitz: “Bankruptcy discharge of student loans requires a very harsh standard.”

Department wants to use government data

The negotiators on the committee for Biden’s revised relief program have identified several categories that could signal hardship. Those include borrowers who received a Pell Grant or qualified for a health insurance subsidy on the Affordable Care Act’s marketplace.
Lawmakers have also pushed the department to consider borrowers’ student debt-to-income ratio, as well as those debtors over a certain age with limited income.
One wrinkle: The Education Department has suggested it wants to identify eligible borrowers through easily obtainable administrative records. As a result, certain struggles, including significant medical or child-care expenses, may be hard for it to capture.
“They much prefer options that can be implemented using data already available to them,” Kantrowitz said.

Currently, the department can access records from the U.S. Department of Veterans Affairs and the Social Security Administration. These agencies could potentially help it find certain borrowers with disabilities and or those living in poverty. Its own data could be used to identify borrowers who received a Pell Grant.
More than 90% of Pell Grant recipients in 2015-2016 came from families with household incomes below $60,000, according to Kantrowitz. More than 6 million undergraduate students received the grants in 2020.
The Education Department could possibly get data from the U.S. Department of Health and Human Services to identify those who’ve received a health-care subsidy, Kantrowitz said.

More relief for struggling borrowers could be on the way

Meanwhile, the government’s collection practices with student loan borrowers, including the garnishment of wages and Social Security benefits, is another area under review, according to the source familiar with its plans. Consumer advocates have said these measures are extreme and punish people already struggling.
The Education Department has also recently made it easier for struggling borrowers to get their student loans erased in bankruptcy court. Previously, it was difficult, if not impossible, for people to part with their education debt in a normal bankruptcy proceeding.
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The U.S. experienced 28 weather and climate disasters in 2023, costing a total of $92.9 billion in damages, according to NOAA’s National Centers for Environmental Information.
More than 18 million rental units are under threat from such environmental hazards, according to a recent study by Harvard University’s Joint Center for Housing Studies.
“It’s clear that not only are climate hazards happening more often, but they’re happening more often in places where people live,” said Jeremy Porter, head of climate implications research for First Street Foundation.

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Extreme weather and climate hazards are becoming more frequent, posing a threat not only for homeowners but for renters.
More than 18 million rental units across the U.S. are exposed to climate- and weather-related hazards, according to the latest American Rental Housing Report from Harvard University’s Joint Center for Housing Studies.

Harvard researchers paired data from the Federal Emergency Management Agency’s National Risk Index with the five-year American Community Survey to find out what units are in the areas that are expected to have annual economic loss from environmental hazards such as wildfires, flooding, earthquakes, hurricanes and more. 
“The rental housing stock is the oldest it ever has been, and a lot of it is not suited for the growing frequency, severity and diversity in environmental hazards,” said Sophia Wedeen, research analyst focused on rental housing, residential remodeling and affordability at the Joint Center for Housing Studies.
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In 2023, there were 28 weather and climate disasters with damages totaling $1 billion or more, a record high, according to the latest report by the National Oceanic and Atmospheric Administration’s National Centers for Environmental Information. These weather disruptions collectively cost $92.9 billion in damages, an estimate adjusted for inflation, the agency found.  
“It’s clear that not only are climate hazards happening more often, but they’re happening more often in places where people live, which is why we’re seeing all of these damages increase over time,” said Jeremy Porter, head of climate implications research for First Street Foundation, a nonprofit organization in New York.

In addition, about twice as many properties in the U.S. have flood risks than what FEMA accounts for, according to research by First Street Foundation.
And flood insurance is only mandated for properties inside official flood zones, Porter said.
“Half the properties across the country don’t know they have a flood risk, which means the building owner may not have flood insurance,” he said.

Some renters ‘can’t afford to move away from the risk’

At a national level, 45% of single-family rentals and 35% to 40% of units in small, midsize and large multifamily buildings are located in census tracts, or neighborhoods, that are exposed to annual losses from climate-related hazards, the Harvard study found.
Units with the highest risk are manufactured housing, such as mobile homes and RVs, said Wedeen. While they’re a smaller share of the rental stock, 52% of manufactured units are located in areas with extreme weather exposure. 
As the market already faces a declining supply of low-rent units available, “environmental hazards would really exacerbate the existing affordability concerns,” Wedeen said. 

Renters in manufactured housing, low-rent or subsidized units are also often stuck with the housing they have or lack the same level of mobility as wealthier renters, experts say.
“These populations are more vulnerable and don’t have the financial means to protect themselves against the risks that exist,” Porter said. “It’s sort of a compounding risk when we see these increases in climate hazards and start impacting people who can’t afford to move away from the risk.”
Most of the state and local funds that cover post-disaster assistance go to homeowners, not rental property owners.
“That in turn puts a lot of burden on renters who are displaced by natural disasters and who may find it hard to find new housing,” she said.

Many homes need upgrades to withstand disasters

Low-rent or subsidized units also face preservation issues, leaving them in poor physical condition. According to the Harvard study, units renting for less than $600 per month have higher rates of physical inadequacy from disrepair and structural deterioration.
Manufactured housing units are more likely to be physically inadequate, meaning they are “much less able to withstand the impact of a weather-related hazard,” Wedeen said.
What renters need is greater investment in the existing housing stock and upgrades that can mitigate the damage to a building and improve its resilience to hazards, Wedeen said.
“Without substantial investment, displacements and units becoming uninhabitable is only going to continue,” Wedeen said.

How renters can protect themselves

It’s important for tenants to understand that they need renter’s insurance to protect their possessions.
Landlords and building owners are responsible for repairing physical damage to the unit or building from a climate-related hazard, and those repairs will depend on whether the landlord or building owner is covered by property insurance, said Porter.
But the landlord’s insurance on the building does not cover renters’ personal property.
Renters should check what type of disasters are included in their renter’s insurance policy. They may need riders or a separate policy to cover risks such as flooding or earthquakes, experts say.

While a lot of the risks are out of the hands of renters, they can research to make informed decisions and prepare.
Before moving to a new area, renters should research the floodplain, look for a building with resilient features and find out what risks that area is exposed to by using search tools such as the FEMA flood map or riskfactor.com, a search tool backed by First Street Foundation’s data analysis.
In some areas, landlords must disclose to prospective tenants if a property is in a floodplain or has experienced flooding in the past. More

Smart Tax Planning

If your tax refund or bill is bigger than expected, it could be time to adjust your paycheck withholding.
You can use last year’s effective tax rate to see if you’re withholding enough federal taxes from each paycheck.

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If your tax refund or bill is bigger than expected, it could be time to adjust your paycheck withholding — and a simple calculation could help, experts say.     
Typically, you get a refund when you overpay taxes throughout the year, and you owe money when you don’t pay enough. Many workers contribute via paycheck withholdings based on a completed form called a W-4.

But the form is “very confusing,” according to certified financial planner and enrolled agent John Loyd, owner at The Wealth Planner in Fort Worth, Texas. “You’re checking these boxes, but you really don’t know how much the IRS is going to withhold.”

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Here’s a look at more tax-planning news.

How paycheck withholdings work

When you start a new job, you fill out Form W-4, which tells employers how much to withhold from each paycheck for federal income taxes. The form asks about your filing status, other income, dependents and more, which affect the percentage withheld.
“If you answer it properly, you probably will get a good outcome,” said JoAnn May, a Berwyn, Illinois-based CFP at Forest Asset Management. She is also a certified public accountant.
“The problem is that form is so foreign to people,” she said. “They see it and their eyes glaze over.” 

You also need to tell your employer about life changes — such as marriage, divorce, having a child or adding a second job — to make the necessary Form W-4 adjustments. After updating Form W-4, it’s important to double-check your paystubs for these changes, Loyd said.

Experts suggest reviewing your withholdings periodically to avoid a larger-than-expected tax bill or refund.  

Calculate last year’s ‘effective tax rate’

While Form W-4 can be daunting, Loyd said you can check your withholding by calculating the previous year’s “effective tax rate,” or the percent of taxable income you pay in levies. This is different from your marginal tax bracket.
Start by reviewing last year’s tax return. You calculate your effective tax rate by dividing your total tax (line 24) by taxable income (line 15).
“A person may be in the 22 percent bracket, but the rate they’re actually paying on everything may be 12 percent,” Loyd said.

If your 2024 earnings are similar to 2023, you’ll want your federal paycheck withholdings at roughly last year’s effective tax rate, Loyd said.
For example, if your gross paycheck is $1,000 and last year’s effective tax rate was 12%, you’ll want about $120 withheld in federal taxes, he said. Of course, this withholding could change if you have earnings from another job.

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In your 50s, it can be difficult to prioritize retirement saving when family may be a higher priority.
Experts say these tips can help ensure you stay on track.

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Turning 50 is a milestone birthday — and it becomes harder to ignore that retirement may be just around the corner. But research shows that many Americans reach that decade feeling financially unprepared for what’s ahead.
Generation X — the oldest of whom turn 59 this year — will be the first generation to rely primarily on their 401(k) plans, research from Goldman Sachs notes.

Gen Xers were most likely to say they are behind on retirement, compared with other generations, the firm’s research found.
A so-called financial vortex — where competing life goals get in the way of financial priorities — is to blame, according to the research. For example, Gen Xers may be balancing care for aging relatives and children that forces them to put their own financial progress on the back burner.
The typical Gen X household has just $40,000 in retirement savings, according to research from the National Institute on Retirement Security.
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Experts say even in your 50s, it’s not too late to take steps to get in better financial shape.

“While retirement is an exciting vision for a lot of people, the transition can be really stress-inducing,” said Keri Dogan, senior vice president of financial wellness and retirement income solutions at Fidelity.
Shifting from saving for retirement to living in retirement is one of the biggest transitions a person will make in their lifetime, she said.
“There’s a lot to do in those preparation years,” Dogan said.

Prepare for the unexpected

To start getting ready for retirement, it helps to come up with a vision for what you want those years to look like, Dogan said.
Start thinking about when you might be able to afford to retire and how you can make your money last and put together a list of decisions you will have to make along the way, such as how to obtain health care coverage, either through Medicare or private insurance, she said.
Also be prepared that your plan will need to be adjusted along the way.
The median age that workers 50 and older expect to retire is 67, according to the Transamerica Center for Retirement Studies. Yet the research also finds that 56% retire sooner than they had planned.

The average retirement age actually falls around 61 or 62, according to Dogan, as many people retire earlier than expected because they become caregivers, get pushed out at work or see their health status change.
“That’s one of the reasons it is so important to have a plan, so you can look at different scenarios and understand what kind of situation you’d be in if something unexpected were to hit,” Dogan said.
Ted Jenkin, a certified financial planner and the CEO and founder of oXYGen Financial, a financial advisory and wealth management firm based in Atlanta, said he typically helps clients come up with a “work optional” plan to leave their long-term corporate jobs for work they find more fulfilling.

Set limits with your children

Gen Xers are providing more support to their children compared with other generations, said Jenkin, who is a member of CNBC’s Financial Advisor Council.
And there’s good reason. Elevated inflation has made it a higher hurdle for those younger adults to move out on their own. Meanwhile, many have student loan balances.
But it is important to set limits with that financial support.
“Gen Xers have a very hard time saying no to their kids,” Jenkin said.
Set boundaries for how long children will remain on a family cell phone plan or auto insurance policy and when it makes sense for them to start paying rent if they’re still living at home, Jenkin recommended.

Save more where you can

Once you hit age 50, you’re eligible for what’s known as catch-up contributions.
This year, savers who are at or above that age can sock away an extra $7,500 in their 401(k), 403(b) and most 457 plans, as well as the federal Thrift Savings Plan, for a total of $30,500 in 2024.
Likewise, retirement savers 50 and up may contribute an extra $1,000 to IRAs in 2024, for a total of $8,000.

Yet many savers are not taking advantage of those higher limits, according to Fidelity. Just 16.7% of those ages 55 to 59 are making retirement account catch-up contributions, the firm has found.
The good news is even if you can’t reach those maximums, just increasing your deferral rate to your retirement saving by just 1% can increase how much you have in retirement.

Brush up on Social Security, Medicare rules

It is a great time in your 50s to look at your Social Security statement to see the retirement benefits for which you may qualify, according to Jenkin.
Importantly, you should also double-check to see that your work records are accurate, he said. The Social Security Administration provides free access to benefit information online.
In addition, because Medicare eligibility does not start until age 65, it’s important to think about how you will obtain health care coverage earlier if you need it. For example, it may make sense for someone to retire at age 63½ and then use COBRA coverage for the 18 months until they reach Medicare age, Jenkin said.
If you’re in your early to mid-50s, it’s also a great time to explore what Social Security claiming strategy fits your particular situation best.

Get expert feedback

It’s hard to spot your own financial blind spots, which is why it helps to consult an expert such as a certified financial planner.
Yet 62% of people ages 50 and up have not consulted a financial professional to help, according to a recent AARP survey.
While a reluctance to pay for advice is one reason respondents cited for not consulting with a professional, experts say it is possible to find cost-effective help. Search tools provided by National Association of Personal Financial Advisors; the CFP Board or the XY Planning Network may help identify potential financial professional matches.
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In 2024, there’s an idea taking hold that overtly rejects the urge to overspend and promotes speaking up about saving money — welcome to the era of “loud budgeting.”
Being vocal about your financial constraints can help curb unnecessary spending, reduce anxiety and achieve broader goals, financial experts say.

TikTok’s latest financial trend, “loud budgeting,” has been gaining steam, and experts say it’s easier to accomplish than many might think.
The concept encourages consumers to take control of their finances and be vocal about making money-conscious decisions, rather than modeling purchase behaviors after celebrities and their bottomless pockets.

It can be as simple as saying, “Hey, I don’t want to spend money right now,” Lukas Battle, a comedian and writer who coined the term loud budgeting, said on CNBC’s “Power Lunch.”
Battle said his idea has been largely met with relief, which is why it has proved popular.
“There’s a lot of pressure to spend, especially when you are seeing so many products being advertised to you all the time or lifestyles that aren’t very attainable,” he said.
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Just months ago, we were coveting Gwyneth Paltrow’s “quiet luxury” courtroom style with $1,450 black Prada boots and a $300 Smythson notebook while justifying such expensive purchases using “girl math.”

Alternatively, “loud budgeting” is centered around the everyday person, or the “average Joe,” according to Battle’s viral TikTok video.
“Let’s send a message to corporations about the national inflation level. Let’s take a stand,” Battle said in the video.
“It’s not ‘I don’t have enough,’ it’s ‘I don’t want to spend,'” Battle added.
In fact, the truly ultrarich are less interested in conspicuous consumption, he contends. In that way, loud budgeting is “almost more chic, more stylish, more of a flex.”

Financial experts love loud budgeting

“Being loud can be empowering,” Erica Sandberg, personal finance expert at CardRates.com, recently told CNBC.com. “With this process, you become proud that you bring a bag lunch, make your own coffee, or take the bus.”
Further, being open about your financial constraints can also help reduce anxiety and can crowd-source solutions, she added.
“Not only can consumers find commonality with budgeting concerns, they can also find community to achieve broader goals and cut down on impulse purchases,” Sandberg said.

Although most Americans say they are living paycheck to paycheck, consumers routinely spend more than they can afford on impulse purchases, many studies show — particularly on sites such as TikTok, Instagram and Facebook.
One report by online lender SoFi found that 56% of consumers said that more than half of their online purchases are spontaneous, driven largely by changing habits post-Covid and the surge in online shopping.
There are a growing number of catchy phrases, such as “bougie broke” and “de-influencing,” which all aim to consciously stop overspending on social media and start saving.
“When opening Instagram and routinely seeing photos of that friend who travels to Europe every month, or near daily dinners in $100 per person downtown restaurants, it can become easy to feel that doing the opposite, putting more into savings for a single annual vacation, isn’t really ‘living,'” said Yuval Shuminer, CEO of budgeting app Piere.
Yet, Battle is spot-on, Shuminer said.
“Deprivation isn’t the goal or the outcome,” she said. “It’s the creation of a lifestyle that creates real individual value. It’s about spending money and allocating resources on what you prioritize in life, and cutting ruthlessly on what you don’t.”

How you can jump on the loud budgeting trend

Quiet the noise altogether, consumer savings expert Andrea Woroch recently told CNBC.
“The most simple way to dodge temptations is to get off the list by unsubscribing from emails, opting out of text alerts, turning off push notifications in retail apps and unfollowing brands on social,” she said.
In addition, deleting payment details stored online helps create a “purchase hurdle” that forces you to think through your buying decisions, Woroch said.
Jacqueline Howard, head of money wellness at Ally, recommends trying “the 48-hour rule,” which requires waiting a full two days before making a purchase, even if it’s on sale.
“This small window of time allows you to calm your emotions from the urgency of the sale and helps you decide if you really want or need the item,” she said.
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Bitcoin miner CleanSpark climbed on Tuesday after the company said it will acquire new mining facilities.
The company said it expects the sites to support about 14% of its revenue shortly after closing.
The crypto industry expects consolidation among bitcoin miners as their mining revenue is set to be slashed after the much-anticipated halving in the spring.

An array of bitcoin mining units inside a container at a CleanSpark facility in College Park, Georgia, on April 22, 2022.
Elijah Nouvelage | Bloomberg | Getty Images

Bitcoin miner CleanSpark climbed on Tuesday after the company said it will acquire new mining facilities that will give it the power and infrastructure to potentially double its hashrate within the first half of the year.
CleanSpark shares were last higher by 12%, also helped by a midday rise in the price of bitcoin.

The company agreed to buy three “turnkey” sites — meaning they need only to plug their existing hardware into the facility — in Mississippi for $19.8 million in cash. That transaction will close within 21 days. The company expects the sites to support about 14% of its revenue shortly after closing.
Additionally, CleanSpark plans to acquire a facility in Dalton, Georgia, for an initial cash payment of $3.4 million. Then, it will invest another $3.5 million to complete the project by April. The facility will expand its presence in Dalton to three sites.
“Our move into Mississippi is all about growing our operations and diversifying our data center portfolio in a measured way,” CEO Zachary Bradford told CNBC. “Our operations in Georgia have given us significant experience in southeastern power markets. … Mississippi is in the same electric reliability region, so we see a lot of synergies there.”

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CleanSpark jumps as much as 10% after acquisition announcementOther than the mining machines themselves, electricity is one of the highest costs for bitcoin mining companies. Some have a contract with a power producer where they buy a certain amount of power annually at a fixed price. Miners who buy power at spot prices stand to lose from any spike in power prices, often in the summer or winter.

The crypto industry has been expecting consolidation among bitcoin miners — particularly those that are smaller, have higher costs or older and less efficient hardware — as miner rewards are expected to be cut in half after the much-anticipated bitcoin halving in the spring.
Bradford previously told CNBC that CleanSpark expects some miners to fall by the wayside after that point, adding that the company was eyeing potential facilities it could plug its own machines into easily. About a month ago, CleanSpark purchased 160,000 mining machines.

“The exciting thing about this expansion is that we’ll be able to quickly slot in our own servers so that we are operating almost immediately after closing the deal, shortening the path to ROI in a very attractive way,” he said Tuesday.
Generally, the mining stocks benefit from bitcoin price increases because those translate into higher mining revenue for the company.
Bitcoin miners were top performers in 2023, outperforming even bitcoin. CleanSpark gained about 440% last year, compared to bitcoin’s 157%.
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Smart Tax Planning

Experts warn that last year’s tax withholding errors could trigger an unexpected bill.
It’s easy to under withhold taxes when you have multiple jobs or change employers, experts say.
Major life events, such as divorce, without updating your Form W-4, can also cause issues.

Guido Mieth | Stone | Getty Images

As millions of Americans start filing returns, experts warn that last year’s tax withholding errors could trigger an unexpected bill.
The IRS requires tax payments throughout the year and many workers do that via automatic employer paycheck withholdings. Typically, you could expect a refund if you overpaid. By contrast, you may see a tax bill if you didn’t pay enough.

For filers with multiple jobs, withholding issues are “always a surprise,” according to certified financial planner JoAnn May, principal at Forest Asset Management in Berwyn, Illinois. She is also a certified public accountant.

More from Smart Tax Planning:

Here’s a look at more tax-planning news.

For example, let’s say you made a combined $60,000 from three jobs — $20,000 each — and the companies withheld taxes from your paychecks.
“Those employers are going to withhold a pretty low percentage” since the companies don’t know your combined earnings, May explained.
A similar withholding issue can happen when changing jobs.
For example, if you made $100,000 during the first eight months of 2023 with one company and $50,000 during the last four months with a second employer, it’s likely the second didn’t withhold enough. “That’s where I see it often,” May added.

Your withholding shouldn’t be ‘one-and-done’

Errors can also happen when you’ve had a major life event and don’t ask your employer to update your withholding via Form W-4, said CFP and enrolled agent John Loyd, owner at The Wealth Planner in Fort Worth, Texas.
For example, if you get divorced, your filing status changes from married filing jointly to single filer, which cuts your standard deduction in half, he said. For 2023, the standard deduction is $27,700 for married couples filing jointly, compared to $13,850 for single filers. If you didn’t adjust your withholding to reflect your new single status, you may not pay enough taxes during the year.

Other life changes that may affect your withholding include childbirth, job loss or receiving unemployment income. Making adjustments can “help avoid an unexpected result,” according to the IRS, such as a big refund or balance due.
While making adjustments early in the year is recommended, experts say it’s important to double-check periodically and make changes when necessary.
Tax withholdings “really shouldn’t be a one-and-done,” Loyd added. More

Collectively, Americans owe $1.13 trillion on their credit cards, according to a new report from the Federal Reserve Bank of New York.
Higher prices have largely caused consumers to spend down their savings and lean on credit cards to make ends meet.
Now, young adults, who are also burdened by high levels of student loan debt, are increasingly falling behind on the payments, the New York Fed found.

Americans now owe a collective $1.13 trillion on their credit cards, according to a new report on household debt from the Federal Reserve Bank of New York.
Credit card balances increased by $50 billion, or roughly 5%, in the fourth quarter of 2023, the New York Fed found. Credit card delinquency rates also jumped — particularly among younger millennials, or borrowers between the ages of 30 and 39, who are burdened by high levels of student loan debt.

“This signals increased financial stress, especially among younger and lower-income households,” said Wilbert van der Klaauw, economic research advisor at the New York Fed.

Why so many Americans are under pressure

Credit card rates top 20%

Credit card rates were already high but spiked along with the Federal Reserve’s string of 11 rate hikes, including four in 2023.
Since most credit cards have a variable rate, there’s a direct connection to the Fed’s benchmark. As the federal funds rate rose, the prime rate did, as well, and credit card rates followed suit.
The average annual percentage rate is now more than 20% — also an all-time high.

Why credit card debt keeps rising

“Even though $1 trillion in credit card debt is a staggering number to wrap your brain around, the unfortunate truth is that it is only going to keep climbing from here,” said Matt Schulz, chief credit analyst at LendingTree.
“Americans are still struggling with lingering inflation and rising interest rates,” he added, “forcing them to lean on credit cards more and more.”
Despite the steep cost, consumers often turn to credit cards, in part because they are more accessible than other types of loans, Schulz said. However, that comes at the expense of other long-term financial goals, he added.

Until recently, most Americans benefited from a few government-supplied safety nets, including the large injection of stimulus money during the pandemic, which left many households sitting on a stockpile of cash that enabled some cardholders to keep their credit card balances in check.
But that cash reserve is largely gone after consumers gradually spent down their excess savings from the Covid-19 years.

What to do if you’re in credit card debt

If you’re carrying a balance, try calling your card issuer to ask for a lower rate. Or you might consolidate and pay off high-interest credit cards with a lower interest home equity loan or personal loan, or switch to an interest-free balance transfer credit card, Schulz advised.
To optimize the benefits of their credit card, consumers should regularly compare credit card offers, pay as much of their balance as they can as soon as they can and avoid paying their bill late, according to Mike Townsend, a spokesperson for the American Bankers Association.
“Any credit card holder who finds themselves in financial stress should always contact their card issuer to make them aware of their situation,” Townsend said. “They may be eligible for some relief or assistance depending on their individual circumstances.”
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