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(image: https://kingged.com/wp-content/uploads/2019/02/instant-payday-loans.jpg)Are Debt Consolidation Companies Worth It?

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Are Debt Consolidation Companies Worth It?

Debt consolidation firms typically offer programs to settle debts, which can have a negative effect on your finances and credit score.

by Erin El Issa Senior Writer Personal finance, analysis of data credit card Erin El Issa writes data-driven research on personal financial matters, credit cards, investments, travel, and student loans. She is a fan of numbers and hopes to make data sets understandable to assist people in improving their financial lives. Before becoming the Nerd at the beginning of 2014, Erin worked as an accountant for tax and freelance personal financial writer. Erin's work has been mentioned in The New York Times, CNBC, on the "Today" programme, Forbes and elsewhere. In her free moment, Erin reads voraciously and tries in vain to keep on top of her two children. Erin is from Ypsilanti, Michigan.

And Jackie Zimmermann Jackie Zimmerman is a former personal-loans and small-business writer for NerdWallet. Her writing has been featured by USA Today and Money.com.

Updated August 6, 2021

Written by Kathy Hinson Lead Assigning Editor Personal financial, credit scoring, financial management and debt Kathy Hinson leads the Core Personal Finance team at NerdWallet. Prior to joining NerdWallet, she worked for 18 years working at The Oregonian in Portland in roles including copy desk chief and team director of design and editing. Prior experience includes copy and news editing for various Southern California newspapers, including the Los Angeles Times. She earned a bachelor's degree in mass communication and journalism from the University of Iowa.

Many or all of the products featured here come from our partners who compensate us. This impacts the types of products we write about and where and how the product is featured on the page. However, this does not influence our evaluations. Our opinions are entirely our own. Here is a list of and .

If you're having trouble making the payments to your credit card, you might be tempted to look for an easy and quick solution. While doing this, you'll likely run across companies that offer debt consolidation. But the majority of "debt consolidation firms" actually sell a more controversial product called debt settlement.

For many consumers, is a risky choice. It should be considered only after you've exhausted all alternatives. It's costly, it can severely damage your credit and savings may take years to be realized.

Make sure you track your debt in an easy method

Sign up to NerdWallet to view your debt breakdown and upcoming payments all in one spot.

Debt consolidation vs. debt settlement

One of the main differences between debt consolidation and debt settlement is who is the one in charge.

Knowing the distinction between the two approaches ensures that you don't lose money or obtaining an outcome that you don't anticipate.

It is a DIY method that you can control. Enrolling in an agreement to settle your debt puts your finances in the hands of debt relief firms who might or may not be able to successfully pay off your debt.

>> MORE:

Debt 'consolidation' programs

The companies that claim to be companies that consolidate debt, and , in reality, offer debt settlement plans that require you to stop paying your bills , and instead pay your monthly bills into an additional savings account.

Once there's enough money in that account, typically after six months, the debt settlement company begins negotiations to your creditor. If they reach an agreement, you'll pay the creditor the amount that they agreed to pay from the account and also pay the debt settlement company a fee for its service.

Debt settlement companies promote savings of between 20% and 35% after fees.

So, are they worth it?

This is the quick answer You should consider debt settlement firms only in the last instance. Enrolling in a settlement program could cost you in a variety of ways:

Service charges vary from 18% to 25% of your enrolled debt, which translates into the range of $900 to $1250 on the amount of debt you owe. There can also be fees to open and maintain the savings account.

If you don't pay your bills, interest and late fees accrue on your balances. If the company that you contracted with to settle your debt does not resolve your debt, you'll become with these debts.

Your credit is harmed, and you may receive lawsuits and debt collection from your creditors.

It could be, since the amount of debt you didn't pay is generally reported to the IRS as income.

>> MORE:

Better option: DIY

Self-help debt settlement businesses tout their expertise at negotiating with creditors, however -when you're sure that debt settlement is your best option -- you could try . It requires confidence in your ability to work with creditors and have enough money available to settle debts the debt, but it can make significant savings in time and money.

Do-it yourself debt consolidation: Resolving debt by combining several debts into one at an lower interest rate could also save money -- and your credit. There are multiple options to go about this, including:

Credit card balance transfer If you are eligible for a zero-interest account credit is your cheapest way to consolidate debt.

: Look for rates that are less expensive than rates on your existing credit.

Home equity: Home equity loans and lines of credit are low-cost, however you'll also put your home at possibility of repossession if aren't paying as per the agreement.

>> MORE:

I still need expert help

If you require expert advice you should consider contacting a nonprofit . These organizations can assist you determine the best way to get a handle on your debt. They can also assist you in setting up a , which can be an alternative that is more secure than the solutions offered by debt settlement firms.

>> COMPARE:

And if, after considering all options that you have, you decide to work with an organization for debt settlement Follow these guidelines:

Consult the , or the, to determine whether the business is registered. Reputable companies will likely be registered to maintain credibility.

Go through the . Look up the company's name on the BBB database to see reviews and accreditation information.

Ask for trusted family members or friends who have used an settlement company.

Authors' Bios Erin El Issa is a credit cards expert and a writer for studies at NerdWallet. The work she has written for NerdWallet was featured in USA Today, U.S. News and MarketWatch.

Jackie Zimmerman is a former personal-loans and small-business reporter for NerdWallet. Her writing has been highlighted in USA Today and Money.com.

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Best Credit Unions and banks

Advertiser disclosure You're our first priority. Each time. We believe that everyone should be able to make sound financial decisions with confidence. And while our site doesn't include every financial or company product that is available We're pleased of the advice we offer as well as the advice we offer and the tools we develop are objective, independent easy to use and cost-free. So how do we earn money? Our partners pay us. This can influence the products we write about (and the way they appear on our site) however it in no way affects our advice or suggestions that are based on hundreds of hours of research. Our partners cannot pay us to guarantee favorable ratings of their goods or services. .

The Best Credit Unions and Banks

See our lists of the most reputable credit unions and banks to help you manage and grow your cash more efficiently.

by Ruth Sarreal Content Management Specialist Bank accounts, bank account bonuses Ruth Sarreal is a content management specialist covering consumer banking topics at NerdWallet. She has over a decade of experience creating and editing content for consumer websites. She was previously editor of articles on personal finance topics for GOBankingRates. She has had her work highlighted in Nasdaq, MSN, TheStreet and Yahoo Finance.

Updated 17 March 2023

Editor: Yuliya Goldshteyn Assistant Assigning Bank Yuliya Goldshteyn is a bank editor with NerdWallet. She previously worked as an editor, writer and a research analyst in a variety of industries, from health care as well as market research. She received a bachelor's diploma in history from the University of California, Berkeley and a master's of social science from the University of Chicago, with the focus on Soviet cultural history. She lives within Portland, Oregon.

A majority of the products featured here are from our partners who pay us. This impacts the types of products we write about and the location and manner in which the product is displayed on the page. However, this does not affect our opinions. Our opinions are entirely our own. Here's a list of and .

The ideal institution or bank depends on what you're in looking for such as a savings account, an account for checking or both. Whatever you're searching for, NerdWallet will have you covered.

This is a summary of the most reputable institutions and accounts for 2023. The APYs displayed are up to date at the time of March 17 2023. All other information is current as of Jan. 13th, 2023.

+ See a summary of NerdWallet's top banks and credit unions of 2023.

Best-of-2023 Bank Winners:

Alliant Credit Union: Best credit union.

Ally Bank: Best bank; best Money market accounts.

Capital One 360: Best online banking experience.

Charles Schwab Bank: Best bank or credit union for ATM access.

Chase: Best for sign-up bonuses as well as branch acces (tie).

Discover Bank: Best savings account.

SoFi: Best checking and savings combo; best checking account in general; the most reliable checking account with high-interest; the best checking account that has no monthly cost; best checking account for to avoid overdraft charges.

Synchrony Bank: Best bank or credit union for CDs.

Wells Fargo Bank: Best credit union or bank for Branch access (tie).

Other excellent accounts :

Axos Bank: Perfect for interest-checking the amount of $50,000.

Connexus Credit Union: Great for interest-checking up to $25,000.

LendingClub Bank: Best for cash back.

Marcus from Goldman Sachs: Best for immediate, high-limit transfers.

Quontic Bank: Most domestic ATMs.

The best credit unions and banks

NerdWallet spent more than 200 hours comparing and grading over 80 financial institutions including banks, neobanks , and credit unions, to pick winners in more than 10 categories. Read on for more information about the banks and institutions that were awarded the top spot this year.

Alliant Credit Union: Best credit union

More than 80,000 ATMs for free; interest checking available.

2.70% APR on savings.

Read more in our .

Ally Bank: Best bank and the most reliable money market account

No fees for overdrafts plus more than 43,000 ATMs

3.75% APY on savings and 3.80% APY on all accounts in the money market account.

Find out more about us in our .

Capital One 360: Best online banking experience

More than 70,000 free ATMs provide tools like virtual assistance and virtual card numbers Teen checking is available.

3.40 percent savings APY.

Find out more about us in our .

Charles Schwab: Best for ATM access

Unlimited all-inclusive worldwide ATM fees reimbursement.

0.45% checking APY.

Learn more about our .

Chase: Best for sign-up bonuses and for branch access (tie)

No minimum direct deposit requirement to earn cash bonuses for the opening of a new checking account.

Over 4,700 branch locations spread across 49 states.

Learn more about our .

Discover Bank The best savings account

There are no monthly fees and 3.60 percent APY.

Find out more about us in our .

SoFi: Great for savings and checking and high interest checking overdraft fee avoidance and more

up to 4.00% APY on savings balances and up to 1.20 percent APY on checking balances (APY is variable and subject to fluctuation).

There are no overdraft charges and there is no fee for overdraft coverage.

Find out more about us in our .

Synchrony Bank: Ideal for CDs

Highly cost-effective CD rates.

Bump-up CDs, and a no-penalty 11-month CDs are also available.

Read more in our .

Wells Fargo Bank: Best for branch access (tie)

Around 4,700 branches spread across the country.

Learn more about our .

Other great accounts of 2023

You should also consider a savings or checking account at one of the institutions below. Savings accounts have APYs much higher than the national average of 0.37% and the checking accounts offer advantages like the possibility of earning interest on your accounts with balances in the checking account as well as reimbursement of ATM fees. (Read more about each type of bank account by reading our articles on and .)

Axos Bank: Great for interest checking on up to $50,000

Up to 3.30% APY when checking balances up to $50,000.

Unlimited ATM fee reimbursements.

Learn more in our .

Connexus Credit Union: Great for checking interest for up to $25,000

The possibility of 1.75% APY when checking balances of that exceed $25,000.

More than 67,000 fee-free ATMs.

Find out more about us in our .

Saves CD Management Checking Money Market

Member FDIC

Savings and SoFi Checking

APR 4.00 percent SoFi customers with direct deposit can earn up to 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 1.20 percent APY on their checking balances. The minimum direct deposit amount needed to earn the 4.00 percent APY on savings. Members without direct deposit will receive 1.20 percent APY on all account balances , including checking and savings (including vaults). Interest rates are variable and subject to change at any time. The rates listed are current as of 03/17/2023. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet

Min. balance for APY $0

Member FDIC

Marcus from Goldman Sachs Online Savings Account

APY 3.75 percentage 3.75% Annual percentage yield (annual percentage yield) with no minimum balance to earn the stated APY. Accounts must be in an open balance to stay open. APY current as of 02/14/2023.

Min. balance for APY $0

Member FDIC

CIT Bank Platinum Savings

APY 4.75 percent

Min. balance for APY $5,000

These cash accounts combine services and features similar to checking, savings and/or investment accounts into one product. The cash management account is usually offered by non-bank financial establishments.

They combine the features and services that are that are similar to savings, checking and/or investment accounts in one product. These accounts for managing cash are usually offered by non-bank financial establishments.

on the Wealthfront website.

Cash Account at Wealthfront

APY 4.30%

Min. balance to APY $1

on Betterment's website

Betterment Cash Reserve - Paid non-client promotion

APY 4.20% Annual percent yield (variable) is as of 03/27/2023.

Min. balance required for APY $0

CDs (certificates of deposit) are a type of savings account that has a fixed rate and term typically, they have higher rates of interest than regular savings accounts.

CDs (certificates of deposit) are a form of savings account with a fixed rate and term generally, they offer higher rates of interest than standard savings accounts.

Member FDIC

Marcus is a Goldman Sachs High-Yield 10-Month CD

APY 5.05 percent 5.05 5 % APY (annual percent yield) as on 03/28/2023. Special Offer Expires 09/15/2023.

Ten months of term

CIT Bank No-Penalty CD

APY 4.80 percent

Term : 11 months

Checking accounts are utilized for cash deposits on a regular basis as well as withdrawals.

Checking accounts are used to make daily cash deposits as well as withdrawals.

They are FDIC Insured

Current Account

APY N/A

Monthly fee $0

Chime Checking Account

APR N/A

Monthly fee $0

Member FDIC

Axos Bank(r) Rewards Checking

APY 3.30 percent Your annual percentage yield may be up to 3.30 percent based on the following combined rate rewards Direct deposits (not including intra-bank transfers from another account) totaling $1,500 or more each month will earn 0.40%. A direct deposit that is eligible for a qualifying amount is required to fulfill to meet the other interest rate qualifications to be eligible. Ten (10) point-of-sale transactions each month, using the Rewards Checking Visa(r) debit card for ordinary purchases that have a minimum of $3 per transaction, or registering for Account Aggregation/Personal Finance Manager (PFM) will earn 0.30 percent. Maintaining your average balance per day of $2,500 within an Axos self-directed trading Invest account will earn 1.00%. Maintaining the average balance per day of $2,500 per month on the Axos Managed Portfolio Invest account will earn 1.00%; and making a monthly payment for an existing Axos bank consumer loan (commercial as well as business loans excluded) through a transfer from your Rewards Checking account will earn up to 0.60%.

Monthly fee $0

Market accounts for money pay interest rates that are comparable to savings accounts and have some checking features.

The money market accounts have rates that are similar to savings accounts, and come with certain checking features.

Member FDIC

Discover Bank Money Market Account

APY 3.50%

Min. balance required for APY $1

LendingClub Bank: Best for cash return

Unlimited cash back of 1% for debit card transactions if you meet an annual minimum amount or direct deposit requirements.

Unlimited world-wide ATM cost reimbursements.

Find out more about us in our .

Back to top

Marcus from Goldman Sachs: Best for immediate, high-limit transfers

Online transfers on the same day that can reach $125,000.

3.75% APR (annual percentage yield) with $0 minimum balance to earn stated APY. Accounts must have an open balance to stay open. APY current as of 02/14/2023.

Read more in our .

Quontic Bank: Most domestic ATMs

More than 90,000 in-network ATMs.

1.10 percent APY on checks when you meet the minimum expenditure requirements for debit cards.

Read more in our .

Looking for other excellent alternatives? Explore our selections of and

Do you have some other idea in particular? If so, you should check out these articles:

Compare the best cash-back and savings accounts

Back to top

Find the top CD accounts

Back to top

Compare the best checking accounts

From top to bottom

Compare the best institutions, banks and credit unions, and cash management accounts

From top to bottom

Find the top accounts for bank accounts for kids and students.

Summary of the best financial institutions and credit unions from 2023

Financial institution

Best option for ...

The NerdWallet ratings are made through our team of editors. The scoring formulas take into account multiple data points for every financial product or service.

The best credit union overall.

The NerdWallet ratings are made by the editorial staff. The scoring formulas take into account several data points associated with each financial service and product.

Best bank overall.

The best accounts for money markets.

NerdWallet's ratings are determined through our team of editors. The scoring formulas consider multiple data points for every financial product or service.

The best Online banking experience.

The NerdWallet ratings are made by the editorial staff. The scoring formulas take into account multiple data points for every financial service and product.

Best bank or credit union with ATM access.

NerdWallet's ratings are determined by the editorial staff. The scoring formulas consider multiple data points for every financial service and product.

Best bank or credit union for sign-up incentives.

The best credit union or bank to access branch locations (tie).

NerdWallet's ratings are made through our team of editors. The scoring formulas take into account several data points associated with every financial product or service.

The best savings account.

The ratings of NerdWallet are formulated by the editorial staff. The scoring formulas take into account several data points associated with each financial service and product.

The most efficient savings and checking account combo.

Best overall checking account.

Best checking account for high interest.

Best checking account with no monthly fees.

The best checking account for overdraft fee avoidance.

NerdWallet's ratings are determined through our team of editors. The scoring formulas consider multiple data points for every financial product or service.

Best bank or credit union for CDs.

NerdWallet's ratings are determined by our editorial team. The scoring formulas consider several data points associated with each financial service and product.

The best credit union or bank to access branch locations (tie).

Another great account of 2023

NerdWallet's ratings are determined through our team of editors. The scoring formulas take into account multiple data points for each financial service and product.

Ideal for checking interest on up to $50,000.

NerdWallet's ratings are determined through our team of editors. The scoring formulas consider multiple data points for each financial product and service.

Excellent for interest-checking of as much as $25,000.

The ratings of NerdWallet are formulated by our editorial team. The scoring formulas are based on several data points associated with each financial product and service.

The best option for cash back.

The ratings of NerdWallet are formulated through our team of editors. The scoring formulas consider many data points for each financial product and service.

Ideal for high-limit, same-day transfers that are available on the same day.

The ratings of NerdWallet are formulated by our editorial team. The scoring formulas consider several data points associated with each financial service and product.

Most ATMs in the US.

Are you trying to find the most powerful banks in the nation?

We looked closely at more than 80 financial institutions and service providers, including the most significant U.S. banks based on assets, internet traffic and other factors; the nation's largest credit unions by assets and membership; and other prominent and/or emerging players in the field. We assessed them based on a variety of the basis of annual percentage yields, minimum balances, fees, digital experience and more.

The survey of providers and financial institutions are: , ( ) , , , , , , , , , , , , , , (, ) , , , , Liberty Bank, , , (by Axos), , , , , , , , , , Scarlet, , , , , , , , in,.. , and .

About the author: Ruth Sarreal is a content management specialist at NerdWallet. She has edited and written content about personal finance topics for more than five years.

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The last two years of prices for vehicles have been a rollercoaster ride for both the sellers and drivers. This summer was a record year for transactions, and an MSRP above $48,000, according to Kelley Blue Book (KBB) and then followed. Fortunately, prices for cars have been settling down this holiday season, since they hit their peak during the summer. But , at the same time -- interest rates have been increasing. The simultaneous rise in rates as well as a drop in cost has hampered any real gains for consumers. Rates of interest for new cars in October, up from 4.2 percent just one year ago, as per Edmunds data. This has compounded into a frustrating circumstance for drivers getting some relief over cost. With the prospect of an economic downturn is in the near future in the near future, it is essential to know how it could ripple down and impact the cost of owning the vehicle. Monthly payments are up 3% A driver's monthly installment is determined by a number of factors, like the vehicle and loan duration. However, the price is affected by the benchmark rate, set by the Federal Reserve, which auto lenders utilize to . As as the Fed rate has risen -which is currently set at 4.75-5 percent over the past year, the cost to borrow money has also increased. The result is that lenders have increased the price of finance. The more it costs for financing, the higher the interest rates, and the more expensive the monthly cost is. October set the record for monthly payments for new vehicles that cost $748, according to KBB. Even though prices have fallen by almost 5 percent the monthly payment is up 3.3 percent, as per a CoPilot study. Although the increase of 3.3 percent may appear small, it adds up to more than a thousand dollars during the . This result was not good for drivers who were finally feeling relief from declining costs for vehicles. Any savings could end up being offset with the rise in interest rates. Even if prices for car transactions are less expensive, the will still be much higher -- making it difficult for drivers to save in the beginning. Lower wholesale prices haven't been transferred to retail prices. Logic tells us that if wholesale prices are lower, then the price that consumers pay should be lower as well -- but unfortunately, that is not the case. Since the start of the year, wholesale prices have dropped more than 15 percent. But the average transaction price for cars is more expensive. This is primarily due to the continued need for new cars. October saw the highest volume of inventory of new vehicles since the month of May 2021. However, just because these vehicles are more readily available does not mean drivers can afford the cost of buying them. For many drivers buying a car right now is not worth the cost. In October, as mentioned earlier, there were record-high monthly payments of almost $750 according to KBB. So, even though vehicles inventory increased, it remains low by the standards of historical precedent. This shortage of inventory means continued high prices in the retail industry. The rise in credit union car loans One reaction to high interest rates has driven some borrowers to finance with . The distinction between the credit union is dependent on the available money present. Credit unions are owned by members and not for profit which means they typically have low fees and less loan rate of interest. For the quarter that ended in 2022, Experian discovered that credit unions have been growing in market share over the last five years -- falling in line with the Fed increasing interest rates. Securing financing through credit unions is one way motorists are finding relief from this . The Fed's fight to quell inflation will not stop anytime soon The Federal Reserve walks a thin line between controlling inflation while ensuring that prices remain affordable for consumers. The auto market is one instance of an area which inflation isn't yet under control. And, unfortunately, these higher rates are likely to disappear anytime in the near future. "Affordability is going to be a challenge for the foreseeable future in both used and new markets," explains Cox Automotive Chief Economist Jonathan Smoke. "It's not the fault of the Fed but it will affect consumer access to transportation." KBB found an average wage earner must put in 40 weeks of work to finance a new vehicle. Such statistics, as Smoke points out, are making vehicle financing especially challenging for lower earners. "Higher rates have already shifted the availability of vehicles and financing to more wealthy consumers," he says. Limited access to vehicles also means that it is difficult for people to take the same actions they would have done in similarly challenging economic times. When we look back to 2008's recession, people were able to benefit from incentives for vehicles and the rush of dealers eager to sell. But with less inventory available and no relief offered to drivers. Two major reactions to the possibility of inflation continuing to rise are that the overall level of debt is increasing-- reflected in increased delinquency rates, and drivers who are experiencing higher the rate at which they are depreciating. Auto loan debt continues to grow. Overall loan balances have increased 8 percent between quarter one from 2021 to 2022 according to Experian. This feeds into the massive . In addition to general debt growth the amount of debt increased. In the second quarter of the year 2022, TransUnion found the following: 3.34 per cent of automobile loans were over 30 days in arrears. This is among the highest numbers of delinquency over the last couple of years. While it's true part of the reason is due to backlogged accounts after the pandemic, this increase is still notable particularly for subprime borrowers , who are most greatly affected. "Delinquencies remain at previous levels for the majority of credit products. However, the number of delinquencies has increased over the last year, especially among the subprime segment of consumers," notes Michele Raneri, vice president of U.S. research and consulting at TransUnion. It is also predicted that auto loan balances will exceed all remaining student loans in the first half of 2023, as per the Consumer Financial Protection Bureau. This increases the domino effect that actions from central banks Central Bank have on vehicle affordability. As delinquencies rise to pre-pandemic levels, it's crucial to know how rising rates of interest will make expensive -- increasing the chance of delinquency. Drivers are faced by a faster than normal depreciation of their vehicles On the top of the high cost of vehicles and interest rates, car owners will likely lose money in the next few months due to the faster depreciation rate of vehicles according to Henry Hoenig, data journalist for Jerry. The biggest influence in this situation comes from the timing of when drivers purchase their vehicles. "People who bought used vehicles in the past year or two paid inflated prices," Hoenig explains. The used car market is cooling, these motorists are at the highest risk of rapid depreciation. But it is not all bad news for vehicle owners. "For at most the next year or so, the value of used vehicles likely won't fall back to what they were prior to the big runup over the past two years," Hoenig says. This is due mainly due to the fact that demand won't return to normal levels soon. Now may not be the best time to buy an automobile. The high costs of car ownership aren't the only cost that Americans are currently faced with. "Consumers are being pushed in a variety of ways in the current climate of high inflation and secondarily by the higher rates of interest is the Federal Reserve is implementing to reduce it," Raneri explains. Buying a vehicle could be among the most costly purchases individuals make. But with the high interest rates being a factor, patience could be a viable option. The reality of expensive prices is somewhat unavoidable but waiting for a big purchase like a car could save you money. If you do not have the privilege of waiting, prepare to spend more money and look into ways to save money when purchasing an automobile in .

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Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers with the ways and pitfalls of using loans to buy the car they want.

Edited by Rhys Subitch Edited by Auto loans editor

Rhys has been editing and writing for Bankrate since the end of 2021. They are committed to helping readers gain the confidence to control their finances by providing precise, well-researched and well-documented data that breaks otherwise complicated subjects into digestible pieces.

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How to transfer a car title Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our goal is to help you make better financial choices by providing you with interactive tools and financial calculators, publishing original and objective content. This allows users to conduct research and compare information for free to help you make informed financial decisions. Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn Money The deals that are displayed on this site come from companies that compensate us. This compensation may impact how and when products are featured on this site, including the order in which they appear within the listing categories, except where prohibited by law. This applies to our mortgage home equity, mortgage and other home lending products. However, this compensation will not influence the information we publish, or the reviews appear on this website. We do not include the entire universe of businesses or financial offers that may be available to you. Photo Concepts/Getty Images

3 min read . Published on October 11, 2022.

Writer: Kellye Guinan. Written Personal and Business Finance Contributor Kellye Guinan is a freelance editor and writer with more than five years of experience in personal finance. She is also an employee full-time at her local library, where she assists people in her community gain access to information on financial literacy, as well as other subjects. Edited by Helen Wilbers Edited by Helen Wilbers is editing for Bankrate since the end of 2022. He is a firm believer in transparent reports that help readers easily get deals and make most appropriate choices regarding their money. He is a specialist in small and auto loans. The Bankrate guarantee

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They ensure that what we write is objective, accurate and reliable. Our loans reporters and editors are focused on the things that consumers care about the most -- various kinds of loans available as well as the best rates, the best lenders, ways to pay off debt and many more. So you'll feel safe making a decision about your investment. Editorial integrity

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There are money-related questions. Bankrate has the answers. Our experts have been helping you master your finances for more than four decades. We are constantly striving to give our customers the right advice and tools required to succeed throughout life's financial journey. Bankrate adheres to strict standards policy, which means you can be confident that our content is honest and reliable. Our award-winning editors, reporters and editors create honest and accurate content to help you make the right financial choices. Our content produced by our editorial team is objective, factual and is not influenced through our sponsors. We're transparent about how we are able to bring quality content, competitive rates and useful tools for you , by describing how we earn our money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We receive compensation for the promotion of sponsored goods and services or when you click on specific links on our site. This compensation could impact how, where and when products appear within listing categories, with the exception of those the law prohibits it for our mortgage, home equity and other home loan products. Other factors, like our own rules for our website and whether a product is offered in the area you reside in or is within your personal credit score can also impact the way and place products are listed on this site. We strive to provide an array of offers, Bankrate does not include information about every financial or credit products or services. If you have recently sold or are currently selling your car, one of the most crucial steps is transferring the car title. It is the legal document stating the owner of the vehicle. Laws and regulations for title transfers vary by state. The process and procedures are typically simple, however, check your state's department of motor vehicles for specific requirements. How to transfer a car title for a buyer the new owner of the vehicle, it is important to handle the paperwork as soon as possible. There is no legal ownership of the car until you get the new title sorted by working with the seller to allow the transfer to occur. This usually follows the following steps. Verify that you are the legitimate owner of the vehicle. Check the VIN and ownership papers to make sure you're not buying a . Also, keep track of the odometer's reading when you purchase the car. Transfer of title by seller: The vehicle's seller must transfer the title into your name after signing the release and transferring the title to your name. Check if liens have been cleared: If the seller holds an outstanding loan on the vehicle, the lien has to be resolved. A letter from the lender stating that the loan has been paid -or simply checking to see if the title is lien-free with the DMV -- should be enough. To obtain a new title: Once the owner has signed off on the title, and any liens have been cleared, go to the DMV to obtain a new title issued in your name. Temporary title issued: In a lot of instances, the DMV can issue a temporary title and mail the final document within a few weeks. The process of transferring your title is simpler if you choose to buy from a dealership. Most dealerships will handle it for you. However, if you decide to , it will be your responsibility and that of the seller to ensure that the documents are handled properly. What is the procedure to transfer a car title to a seller if you are a seller, you have to transfer the ownership over to the purchaser. This is a crucial step because you still hold legal title to the vehicle until the transfer takes place. Until then, you will be held liable for any legal encumbrances or fees due to the new owner. You, as the owner of the vehicle have to sign the old title so the buyer gets a new title under their name. To speed up the process, go to the DMV with the buyer, and then get the document notarized if your state requires it. In the event that more than one individual is named on the certificate, you need to check whether the words between the names on the title is "or" or "and" prior to completing the transfer. In the case of an "and," you will require the person who is not listed to approve the transfer too. To a dealer comes with less paperwork, although you'll probably earn less money this way. But, a dealership will likely handle the title transfer for you. You will still need to accept your title but it should be less time-consuming overall. How to transfer the title of a car using the help of a loan However, the transfer of a car title is fairly straightforward, or may be a little more complicated. If the current owner is paying back an auto loan and the lender will likely have possession of the title. Contact the lender to confirm that the loan is fully paid off so the new buyer can . Then you can request proof of loan payment to be submitted to your local DMV so that the transfer will be completed. Documents needed Although the necessary documents vary by state however, when it comes time to transfer at your DMV you'll most likely require the following documents to complete the sale bill Price of sale Odometer reading date of sale. Insurance details Name of the buyer and the recipient as well as address Information about the license The bottom note that transferring your title to your vehicle is the final step in the buying or selling process, so it's important to do it correctly. Make sure all vehicle owners sign the title to transfer ownership over to the purchaser and all lien holders are cleared to complete the sale properly. Because the rules are different for each state, check with the local DMV and call ahead to ensure you have all needed documents before you go in for the new title.

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Written by Personal and business financial contributor Kellye Guinan is a freelance editor and writer with over five years ' experience within personal finance. She also is a full-time worker at her local library, where she assists the community gain access to information on financial literacy, in addition to other topics. Edited by Helen Wilbers Edited by Helen Wilbers Editing for Bankrate since late 2022. He is a firm believer in the clarity of reporting that can help readers successfully get deals and make most appropriate choices regarding their finances. He is a specialist in auto and small business loans. Similar Articles: Auto 3 minutes read on January 19, 2023 Auto 4 min read Sep 20, 2022 Auto Loans Read 3 minutes Aug 18 2022. Auto Loans 3 min read Jun 23 2022

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How can I obtain a car loan out of my name? Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our aim is to assist you make better financial decisions by offering interactive tools and financial calculators, publishing original and objective content, by enabling users to conduct research and compare information for free to help you make informed financial decisions. Bankrate has agreements with issuers such as, but not limited to American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make Money The products that appear on this website are provided by companies who pay us. This compensation can affect the way and when products are featured on this site, including, for example, the sequence in which they be listed within the categories of listing in the event that they are not permitted by law. This applies to our mortgage, home equity, and other home lending products. This compensation, however, does affect the information we provide, or the reviews that appear on this website. We do not contain the entire universe of businesses or financial offers that may be open to you.

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2 minutes read published March 03, 2015.

Written by Justin Harelik Written by Justin Harelik The Bankruptcy Adviser

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Dear Bankruptcy Adviser: How do I obtain a car loan under my name? I can't get anyone to refinance it and my ex-boyfriend is not paying. Is bankruptcy my only option? -- Anna Dear Anna As I earn money by working on bankruptcy cases, I hope you can find an alternative for the mistake you made in your judgment and especially if it is the only debt you have. Co-signing the loan is one of the most common reasons that people file bankruptcy. You did sign the agreement and agreed to pay the amount; and you're now paying for the cost. The lender won't take your name off of the loan just because you and your boyfriend are no longer together. Similar to how the lender is not able to influence your dating choices and choices, it has no influence on your decision to separate. It does, however, have your signature agreeing to repay the balance of this loan. In addition, it does not have any incentive to let you out of the agreement until it is paid in full. There are four options to consider at this point to pay the balance Perhaps, you are able to make use of the car while paying the balance and can afford the payment. This can protect your credit and eventually gets you the title to the car. Find someone else to take over the payment: you can have a friend pay the balance and also drive the car. You are still 100 percent responsible for paying off this car. But you can convince someone else to assist. Maybe a friend can make a percentage of the payment and you pay the difference. Make sure all drivers have the appropriate insurance. Don't let someone drive your car without insurance coverage to drive it. Bring the car back to the lender The return is as a repossession in the credit file. The lender will auction off the vehicle and send you a bill for the remaining balance following the sale, which is known as the deficiency balance. The customer will be required to pay that amount. Do not ignore the issue It is likely that the lender will still repossess the car and come after you for the amount due. I've heard of clients saying they were going to pursue the other party responsible and force them to pay. It sounds great in theory, but making the opposite party pay is extremely difficult. If you can figure out the best way to accomplish this, you can start your own co-signer collection company since that would be impressive, in fact. Best of luck! Ask the adviser To ask a question of the Bankruptcy Adviser, go to the "Ask the Experts" page, and choose "Bankruptcy" to select the topic. Find more columns and learn more on debt-management.

The content of Bankrate, including the advice and expert columns as well as the website, is designed to aid you in making financial choices. The content is wide in scope and does not consider your personal financial situation. Bankrate suggests that you seek the advice of advisers who are fully aware of your personal circumstances prior to making any decisions in implementing any investment plan. Be aware that the use of this website is subject to the rules of . Related Links:

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2022 American Household Credit Card Debt Study

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2022 American Household Credit Card Debt Study

The annual NerdWallet study shows that credit card debt is growing in tandem with the rising cost of living. Additionally, many Americans are concerned about financial issues in the year to come.

By Erin El Issa Senior Writer | Personal finance, data analysis credit cards Erin El Issa writes data-driven studies on personal finance, credit cards, investment, travel, banking as well as student loans. She loves numbers and aims to simplify data sets in order to assist consumers in improving their finances. Before becoming a Nerd during 2014, Erin worked as an accountant for tax purposes and freelance personal financial writer. Erin's work has been cited as a result by The New York Times, CNBC as well as on the "Today" show, Forbes and elsewhere. In her spare time, Erin reads voraciously and tries in vain to keep up with her two kids. She is based in Ypsilanti, Michigan.

Published Jan 10, 2023 9:16 AM PST

Written by Paul Soucy Lead Assigning Editor Credit cards, credit scoring personal financial planning Paul Soucy has led the Credit Cards content team at NerdWallet since 2015. He worked as an editor at USA Today, The Des Moines Register and the Meredith/Better Homes and Gardens family of magazines for more than 20 years. He also established a profitable freelance writing and editing practice that focuses on personal and business finance. He was editor of USA Today Weekly International Edition for six years and won the highest distinction of the year from ACES: The Society for Editing. He holds a bachelor's degree in journalism, as well as a Master of Business Administration. The family lives in Des Moines, Iowa, with his fiancée, his two sons, and an animal named Sam.

The majority or all of the products we feature are from our partners, who pay us. This influences which products we feature and where and how the product is featured on a page. However, this does not influence our evaluations. Our opinions are our own. Here's a list and .

The past year has been a very expensive one. Cost of living is rising faster than incomes, forcing many Americans to take on more debt to make ends meet. In addition, interest rates that have increased in response to inflation are making debt more expensive.

NerdWallet's annual review of the debt burden of households shows that the balances on credit cards carried from month to month have increased in the past twelve months, reaching approximately $488 billion as of 2022 . Auto loans as well as student loans and overall debt loads also increased over the course of the year.

Here's a breakdown of what U.S. households owed in total and the average amount per household with all types of debt at the time of December 20, 2022:

Kind of debt

Total amount owed by a typical U.S. household with this credit

Total owed in U.S.

Percentage change of total owed between 2021 and 2022.

Any kind of debt*

$169,242

$16.9 trillion

+7.83%

Credit cards (total)*

$18,054

$1.11 trillion

+15.25%

Credit cards (revolving)

$7,919

$488.12 billion

+32.64%***

Mortgages

$227,188

$11.92 trillion

+8.33%

Auto loans

$29,251

$1.55 trillion

+6.06%

Student loans

$59,149

$1.6 trillion

+1.19%

* This debt could include mortgages and mortgages, home equity line of credit, auto loans credit cards, loans for students, loans and other household debt, according to the Federal Reserve Bank of New York. *Total U.S. credit card outstanding debt is comprised of transacting and revolving balances. Revolving debt was calculated using the average of the previous five years of percentage that credit card debt is that is considered as revolving (carried from month to month) as opposed to transacting (paid in full every month). The past few years, we've had these numbers from Experian. The credit bureau declined to give the revolving and. transactions data for 2022.

An update on the data for this year

The 32% rise in credit card debt that is revolving which is balances on credit cards that are carried from month to month could be attributed to two things: a significant increase in total credit card debt (revolving and nonrevolving) and a higher estimated amount of the revolving debt. Credit card debt total rose by 15 percent. With the cost of living outpacing income growth so it is only natural that a greater share of the increase was through credit card debt that is revolving. This is merely an estimate. We calculated it using the average percentage of revolving debt from the last five years. This figure is higher over the previously lower revolving credit percentage of 2021 however it is similar to percentages from prior years prior to the COVID-19 pandemic.

The annual study we conduct analyses government data -- from such sources like The U.S. Bureau of Labor Statistics and the Federal Reserve Bank of New York to examine how the debt of households has changed over the last year. NerdWallet also recently commissioned the online poll of more than 2,000 U.S. adults, conducted by The Harris Poll, to learn more about the way Americans are feeling about their debt, and how they think future interest rate increases will affect their financial situation. We also inquired about Americans' usage of "buy now buy later" services, and how their income has (or hasn't) kept pace with inflation, and their financial concerns for the year to come.

Key results

The cost of living is rising faster than incomes. In the past year, the median household income has grown just 4% however, the total price of living increased by 8 . The survey found that nearly fifty percent of all employed Americans (45%) claim that their earnings haven't increased enough over the past twelve months to keep pace with inflation.

Buy now, pay later services may mean deeper debt for millions. One in five Americans (18 percent) said they've employed a BNPL service in the past 12 months.

Consumers are anxious about finances in the coming year. Seven in 10 Americans (69%) have concerns regarding their finances for the coming year. The number. 1 worry is having to borrow more or take on borrowing to meet the needs (31 percent) and then having to pay more interest on their debt (27%).

The average amount of interest on credit cards that households pay has increased due to the recent Federal Reserve rate hikes and the increasing amount of credit card debt revolving. U.S. households that carry credit card debt are expected to pay an average of $1,380 the interest rate this year . And that's assuming interest rates don't rise.

"Credit card debt is usually considered to be the result from frivolous spending, but for the majority of Americans this isn't true," says Sara Rathner who is a credit card NerdWallet expert. "Consumers feel the pinch of higher prices and interest rates, and paychecks just aren't keeping up. Many are forced to make difficult choices, such as going into debt to fund essentials."

Cost of living outpaces earnings growth by a significant amount over the last year

Every year, we examine the increase in the cost of living as compared to the household income over the prior decade to see if income is keeping pace with expenses. If we use the 10-year time frame, we have found that income is growing: Median household income is up by 44% from 2012, while the overall cost of living has increased by 28% in the same span . However, the picture is drastically different when you consider quick-term growth due to the COVID-19 virus and the unusually high inflation.

The growth rate over the last three years -from pre-pandemic up to todaythe median income has risen by 7%, but the overall cost of living has increased by nearly 16 . This includes a rise of 27% in transportation costs as well as a 20% rise for food and beverages expenses, and a 14% increase in housing costs. And that may partly explain the reason why, as per our study, 45% of Americans say their overall financial situation is getting worse as compared to before that COVID-19 epidemic.

In the survey, nearly 50% of working Americans (45 percent) believe that their wages haven't been increasing enough in the last twelve months to keep pace with inflation. In the consumer price index and income growth data backs this assertion. Over the past year, we've seen prices soar up to 8.2 per cent annual inflation at the time of September 2022. It includes an increase of 13 percent increase in transportation expenses, 11% in drinks and food costs, and 8% increase in the cost of housing. Meanwhile, the median household income has increased by 4% in this time .

Consumers are doing what they can to fight rising prices. According to the study more than 4 out of 5 Americans (79 percent) declare that they've implemented measures to combat rising prices over the past six months. 42% of Americans say they've driven less, while 39% say they've bought more brands from the stores and non-processed items. Nearly one in five Americans (19%) have taken on more debt as a result of inflation in the past six months.

" Examining your current spending for places to cut back and then putting the extra funds to debt repayment or savings can be a big help. " Sara Rathner , NerdWallet expert on credit cards

Debt making Americans feel stressed, anxious and overwhelmed.

Over the last year, more than 3 out of 10 Americans (28%) declare that their debt has increased. 14% of Americans have taken on medical debt in this time. It's likely that this debt is having a negative impact on their lives.

According to the study the survey found that 41% of Americans who are currently in debt are stressed about it and 35% are overwhelmed. This feeling of being overwhelmed is more common among Americans who earn a household income of less than $75,000 and who have debt 44% of this group feel this way, in contrast to 27% of the indebted Americans who have annual household incomes of $75,000 or more.

BNPL could be hiding other debt

Our annual analysis of household debt looks at traditional debt types including mortgages, credit cards, and student loans. The data on these debts is compiled and reported by government sources such as that of the Federal Reserve Bank of New York. But the debt problem may get worse due to the increasing number of short-term loans offered by companies like Affirm and Klarna. BNPL services allow you to purchase something today and pay back in installmentsusually 25% at the time of purchase and 25% each two weeks until you pay it off. Longer-term BNPL options usually charge interest, like an typical installment loan.

Based on our study that nearly one in five Americans (18%) have utilized the BNPL service within the last twelve months. The situation is even more prevalent for younger Americans: 25% of Generation Zers (ages 18 to 25) and 30% of young adults (ages between 26 and 41) have utilized these services within the past year, while 16% among Gen Xers (ages 42-57) and 7% from baby boomers (ages 58-76).

A few Americans depend heavily on BNPL services to pay for everyday necessities items that are consumed before they're paid for. According to a report released in September 2022 by the CFPB, or CFPB the use of BNPL services for daily or necessary purchases -- like utility bills, gas and groceries -- was up 434% from 2020 to 2021 and increasing by 1,207% between the years 2019 and 2020.

BNPL services are often interest-free However, they could be charged late fees for those who miss payments. The CFPB report revealed that 10.5 percent of BNPL clients were charged at minimum one late fee in 2021. And while late fees tend to be small about $7 on the annual average loan balance of $135 -- the report highlights possible disadvantages of these services which could become financially unhealthy such as overextension or taking on more loans than you can reasonably handle.

For those who only use the BNPL every now and then the possibility of overextension shouldn't be a problem. However, for those who stack loans and take on several loans in a short period of time and are regular BNPL users, these payment obligations can affect your ability to make their other bills on time because of the volume of BNPL payments to make. This could lead to penalties for late payments, interest charges and even harm to credit scores.

Many Americans are bringing financial stress into the new year

The last year was expensive, and many people aren't confident that things will get better in the next year. Seven out of 10 Americans (69 percent) have financial worries about the coming year, with a top concern being having to go into more debt to meet the needs (31%).

More than one quarter of Americans (27 27.7%) are worried about having to pay higher interest on their debt over this next year; this comes after a series of rate hikes by the Federal Reserve and the possibility of additional rises in 2023.

The interest rates on credit cards are increasing and could be higher

These actions by the Fed have raised the average interest rate on accounts incurring interest to 18.43% as of August 2022, according to the Federal Reserve Bank of St. Louis. It is now the most average rate since the St. Louis Fed began keeping track of this data in the year 1994. For American households that carry an average of revolving credit card debt it would cost $1,380 in annual interest charges. Last year, average interest charges were $1,029 annually due to lower revolving credit card debt and lower interest rates.

During 2022, Americans were treated to seven interest rate increases from the Fed, and more could be coming in 2023. According to the survey over 3 in five Americans (61 percent) think future rate increases will impact their finances, whether in good or bad ways. Although 30 percent of Americans think that it will make their existing credit more expensive, and 28% believe it will make new loans more costly, one of 5 Americans (20 percent) think they'll get more interest from their savings.

What do Americans can do?

Make preparations for a recession that could be coming. At present there is no recession declared officially, however some experts suggest that we're currently in one or is coming soon. If you do know that one is coming, though it's hard to know what to expect because the effects of a recession aren't common nor universal. Moreover, the uncertainty could quickly escalate into disaster. The past several years have given plenty of evidence about the importance of preparing for the unexpected and there are strategies to minimize the damage on your financial health.

If you're able to do so, add money to your savings routinely. It could be necessary to build an emergency fund that covers three to six months' worth of expenses, or perhaps making savings higher than that for the eventuality of longer-term income loss. To make more money to put toward savings, look at your budget and determine where you can cut. There is no need to reduce your spending forever, but in the short-term, it can help you increase your savings more quickly.

"If a few months worth of expenses seems too much for you to be able to set aside right now, aim at a few hundred dollars in an emergency savings account," NerdWallet's Rathner suggests. "It can be enormously helpful when you're faced with an unexpected expense."

" It's impossible to manage the economy in general but you can take small steps to feel financially secure now. " Sara Rathner , NerdWallet credit cards expert

Pay now rather than later, if you are able to. Using a buy now, pay later service may be right for you, but before you use one, consider the alternatives. If you have enough funds for the payment of your balance putting the amount on a credit card can be rewarded and protect the purchase in case of a return or defective item. It's also a good idea to save money for non-essential items for the duration of 6 weeks, which is which is the normal BNPL timeframe -- and then make the purchase. You may find you no need to purchase the item after a certain amount of time has passed.

If you opt to utilize BNPL services, set up automatic payments to avoid late fees and limit the amount of purchases you can make in a the short timeframe to ensure you don't get overwhelmed.

Avoid big financial moves If you can, avoid major financial moves. With consumer concerns about the rising cost of interest and credit becoming more difficult to get access to, and decreasing credits, it is possible that you might prefer to put off taking on new credit obligations as long as you are able to. This may not be feasible for you, and that's OK; sometimes we can't wait for the perfect time, particularly when experiencing financial difficulties. However, if you are able to put off making big financial decisions and make major financial decisions, it's probably a great idea to do so.

"This is the ideal moment to concentrate on the basics of financial management," Rathner says. "Checking your recent spending to see where you can cut down and putting any extra money for savings or debt repayment can be extremely beneficial."

Know how interest rates will can affect your finances. Over a fifth of Americans (21%) aren't certain if future interest rate increases will affect their finances, according to the study. If you're in the market for credit with variable interest rates, like credit cards or a home equity line of credit -- or have savings accounts the higher rates could impact you. Same applies to new loans with fixed rates such as a mortgage, auto loan.

Increases in interest rates can make your debt more costly however they increase your savings faster. If you're in debt at a variable rate try to pay more or less frequent payments to reduce it faster. Avoid applying for large loans that have fixed rates too as you canhigh rates can make large purchases, such as a house or vehicle, a lot more expensive. If you have an account for savings, make sure you check the interest rate. Rates were incredibly low until just recently, but now you can find with Annual percentage rate, or APRs, of at least 3.

"The risk of uncertainty in the economy is always a source of anxiety," Rathner says. "You can't manage the economic system in general however, you can take the smallest steps to feel financially secure now."

Methodology

The survey was conducted online within the United States by The Harris Poll on behalf of NerdWallet from Oct. 25 to 27, 2022 with 241 U.S. adults 18 and older. The precision of sampling of Harris polls online is determined with a Bayesian credibility interval. For this study the data collected is reliable to within +/+/- 2.8 percentage points using the 95% confidence level. For more information on the survey's methodology, including weighting variables and subgroup sample sizes, get in touch with Lauren Nash at .

NerdWallet's analysis includes data from the following sources:

December 2022, as reported by the Federal Reserve Bank of New York's Center for Microeconomic Data.

, November 2022, from the U.S. Census Bureau.

from members of the Board of Governors of the Federal Reserve System.

September 2022, data from September 2022, from the U.S. Bureau of Labor Statistics.

, December 2021, from the U.S. Census Bureau.

September 2022, taken from September 2022, from the U.S. Bureau of Labor Statistics' National Compensation Survey.

August 2022, from The 2022 August issue of the Federal Reserve Bank of St. Louis.

Expand to footnotes for footnotes

1. Credit card balances that are revolving calculated in a different way from other types of household debt. The Federal Reserve Bank of New York utilizes data from Equifax, one of three major credit reporting bureaus within the U.S., as the source for its credit card debt data and includes revolving balances (debt transferred from month to month) as well as transacting balances (debt which will be paid off on the next statement). In the past, we've used data of the credit bureau Experian to calculate the percentage of balances that were revolved and transacted on bank credit cards. Experian did not provide information for 2022, therefore we used the average of percentages from 2017 to 2021. Information on revolving balances on retail credit cards wasn't provided, so we assumed that cardholders revolved debt on banks and retail credit card credit cards at the same time. Then, we multiplied total balances on credit cards across the U.S. -- $1.11 trillion as of December 20, 2022 -- and then divided it by the proportion of debt that is revolving. (According reports from the New York Fed, the household's credit card balances of $986 billion by December 2022. This includes bank credit cards , but they do not include retail credit card debt. To make this figure more representative of the total cards, we took $986 billion, and then added that figure to 25 percent of the total "other" debt. The New York Fed says about one quarter of the so-called other debt is outstanding credit card loans.) In addition, we divided this amount by the number of households that have revolving credit card debt. We estimated the number houses by taking the number U.S. households by the proportion of households with that credit card (using the 2022 forecast based on 2019 data taken from the Federal Reserve's Survey of Consumer Finances).

2. To determine the amount of debt owed by households for each category -- with the exclusion of revolving credit card debt -- we took the average of each type of debt that was reported to the Federal Reserve Bank of New York and then divided this amount into the total number of homes with this type of debt. We calculated the number of households by multiplying the total number U.S. households by the proportion of households with that debt, based on the data of the latest Survey of Consumer Finances.

Consumer price indexes, or CPIs, measure the changes in prices for a variety of services and goods for consumers. The price indexes that we examined comprise prices for clothing as well as education and communications, food and beverage, food from home taken away from home, housing medical, other products as well as services, recreational activities and transportation. As per the U.S. Bureau of Labor Statistics, the price index for all items grew between 274.214 to 296.761 between September 2021 and September 2022. Transportation CPI increased by 237.107 to 267.043 food and drink CPI increased from 280.413 up to 310.635 as did housing CPI rose by 283.532 up to 306.323 between September 2021 and September 20, 2022. To measure the change in the price index categories with income growth from 2012, we forecast the 2022 median household income by using the 2021 median income of $70,784, then increasing or decreasing it according to the changes in quarterly percentages reported within the Bureau of Labor Statistics' Employment Cost Index data for civilians. Based on census data, the median household income was $70,784 in 2021, and our projections show the median household income to be $73,653 in 2022.

4. To calculate credit card interest over the course of a year We calculated the credit card debt that is revolving as well as information about the average interest rate for credit card accounts that have been assessed interest from the Federal Reserve Bank of St. Louis beginning in August 2022. In the event of a constant balance we multiplied the average revolving credit card debt of households with outstanding credit card loans by the APR average. This is merely an estimate; for simplicity, our calculations don't consider daily compounding or fluctuating balances.

5 Based on the U.S. Bureau of Labor Statistics, the price index of all items grew from 231.015 to 296.761 between September 2012 between September 2012 and September 2022. Based on Census information, the median household income was $51,017 in 2012. our projections show a median household income of $73,653 for 2022.

6. Based on the U.S. Bureau of Labor Statistics The price index of all items increased between 256.596 up to 296.761 during the period between September to September 2022. Transportation CPI was up by 209.896 to 267.043 Food and beverage CPI rose to 258.59 to 310.635 as well as housing CPI increased from 267.555 and reached 306.323 from September of 2019 between September 2019 and September 2022. Based on Census data the median household income was $68,703 in the year 2019; our projections show a median household income of $73,653 in 2022.

About the author: Erin El Issa is an expert in credit cards and studies writer at NerdWallet. Her work has been highlighted on USA Today, U.S. News and MarketWatch.

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The article was written by Lauren Schwahn Lead Writer | Personal finances and debt Lauren Schwahn is a writer at NerdWallet who covers debt, budgeting and savings strategies for money. She contributes to the "Millennial Money" column in The Associated Press. The work she has contributed to was highlighted on USA Today, MarketWatch and many more. Lauren holds a bachelor's degree in historical studies from the University of California, Santa Cruz. She is located within San Francisco.

Updated Dec 5, 2022

Written by Rick VanderKnyff Senior Assigning Editor | Los Angeles Times; University of California, San Diego; Microsoft Rick VanderKnyff leads the team responsible for expanding NerdWallet's content to additional topics within personal finance. Prior to that, he worked as a channel manager at MSN.com, as a web manager at the University of California San Diego and as a copy editor and staff writer at The Los Angeles Times. He holds an undergraduate degree of Arts in communication and a Master of Arts in Anthropology.

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The budget planner can be a device, such as a worksheet or template, which you can use to create your budget. A well-designed budget planner can help you choose the best way to spend your money, while also cutting down or eliminating debt. NerdWallet recommends the suggests that 50% of your earnings goes to necessities, 30 percent to wants and 20% toward savings and debt repayment.

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