Americans Are Finally Paying Off Their Debt, and Credit Card Companies Are Scrambling

If you’ve got credit card debt, you know how painful it is. It’s the most expensive kind of debt you can have, and your credit card companies are just getting rich and fat while they gouge you with high interest rates.

Wouldn’t it be great to turn the tables on them? Well, now a lot of people are. More and more Americans are simply paying off their credit card balances, and that’s making credit card companies like Capital One, Citibank and Chase really, really nervous. That’s because their whole business model is based on gouging you.

“Americans are paying down their credit card debt at levels not seen in years. That is good news for everyone but credit card issuers,” reports The Wall Street Journal. “Many card issuers rely on growing card usage and balances for their revenue, and they are wondering if the pandemic trends will turn into a long-term shift.”

Wouldn’t it be nice to get a little revenge and make your credit card companies sweat for a change? Now you can, and it’s easier than you think.

Credit cards charge you harsh interest rates that routinely rise north of 24% APR. But a website called Fiona could help you pay off that bill as soon as tomorrow.

Here’s how it works: Fiona can match you with a low-interest loan you can use to pay off every credit card balance you have. The benefit? You’re left with just one bill to pay every month, and because the interest rate is so much lower, you can get out of debt so much faster. Plus, no credit card payment this month.

If your credit score is at least 620, Fiona can help you borrow up to $100,000 (no collateral needed) with fixed rates starting at 5.20% and terms from 4 to 144 months.

Fiona won’t make you stand in line or call a bank. And if you’re worried you won’t qualify, it’s free to check online. It takes just two minutes, and it could save you thousands of dollars. Totally worth it.

All that credit card debt — and the anxiety that comes with it — could be gone by tomorrow.

They’re Getting Awfully Nervous

These days, credit card companies are sweating bullets because Americans’ credit card balances are falling. They shrunk by a whopping $49 billion in the first quarter of 2021 compared to the previous quarter, according to data released last week by the New York Fed,

Overall, credit card balances are down nearly 15% compared to a year before, according to the credit reporting firm Equifax.

For big credit card issuers like Capital One, Discover and Synchrony (the largest issuer of store credit cards), balances are down by 17%, 9% and 7% compared to a year ago, those companies reported.

Why is this happening?

When the COVID-19 pandemic hit, banks expected delinquencies to surge, forcing borrowers to rely on their credit cards to make ends meet, The Wall Street Journal reported. But then the government stepped in with stimulus checks and expanded unemployment benefits. It allowed borrowers to pause payments on mortgages and student loans. So that surge of delinquencies never happened.

Now, “it appears that many households are working to reduce their revolving debt balances, and this is happening across the board,” the Fed wrote.

Raise Your Credit Scores — Instantly

Improving your credit scores can take a lot of time and effort, and for what? Where do you even start?

We found a way you could potentially add points to your credit scores right now — which could make more of a difference than you think.

Credit scores are split into five categories: very poor, fair, good, very good, or exceptional. Getting tipped over the edge into the next-highest bracket can save you thousands of dollars on a mortgage or car loan. It also can help you qualify for a better credit card — one that gives you points or cash back.

Experian® — you know them from your free credit report — has a free feature called Experian Boost™* that gives you credit for the phone and utility bills you’re already paying to your Experian Credit Report. This helps show lenders you have a history of making on-time payments — an important factor in credit-score calculations. In fact, users who saw a FICO® Score increase with Experian Boost added an average of 13 points to their FICO Score** instantly.

You might be thinking: What will 13 points even do for me? But the difference between a “fair” and “good” credit score is ONE point, and that can make all the difference.

Here’s how it works: When you create your free account, you’ll link up the bank account you use to pay your phone and utility monthly bills. Experian Boost then looks for bill payments that wouldn’t otherwise be reported to the credit bureau, such as cell phone and utility bills, and adds them to your Experian Credit Report. (Your info stays completely private and encrypted, by the way.)

By reporting these on-time payments, Experian has already added more than 39 million points to people’s credit scores — see if you can add points to your credit scores today.

*Results may vary. Some may not see improved scores or approval odds. Not all lenders use Experian credit files, and not all lenders use scores impacted by Experian Boost.

** Credit score calculated based on FICO® Score 8 model. Your lender or insurer may use a different FICO® Score than FICO® Score 8, or another type of credit score altogether. Learn more at Experian.com.

Mike Brassfield ([email protected]) is a senior writer at The Penny Hoarder. He paid off all his credit cards, and wow did it feel good.