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Donald Trump is President Again : 4 Key Financial Impacts In 2025

Feb 03,2025 · 4min read · 144 views

On 20th January 2025, Donald Trump became the 47th president of the United States. Thousands of Trump supporters gathered in Washington DC filled the occasion with pageantry. In his inaugural address, Trump emphasized America’s economy and the issue of immigration, as well as promoted government-run diversity programmes.

“The golden age of America begins right now. We will not allow ourselves to be taken advantage of any longer,” Trump said in his inaugural address. He added that the US would once again be considered a ‘growing nation’ and pledged to improve the country's overall financial health.

Here are 4 key financial takeaways from Trump’s return to the Oval Office.

1. Tackling Inflation Through Housing & Energy Costs

The surge of inflation post-2022 has continued to be more than the Federal Reserve's target for a 2% annual rate. During his Presidential rallies, Trump brought this issue to the forefront multiple times and assured people he would ‘end inflation on day one’ if re-elected.

On his first day, Trump issued several executive orders, including one addressing housing and energy costs—key contributors to inflation. These expenses make up a substantial portion of people's budgets, so lowering them could significantly improve living standards.

While the President listed ways to tackle inflation, he also mentioned imposing tariffs on Mexico and Canada starting 1st February. According to several economists, these tariffs might raise the costs of consumer goods as companies will likely pass this tariff on to the consumers. This in turn might negate his initiative to reduce inflation.

Additionally, he expressed his intent to address the US trade deficit with the EU by implementing tariffs or increasing US energy exports.

2. Dramatic Changes in Healthcare

Trump has revoked nearly 78 Biden-era executive orders, including one that extended Affordable Care Act (ACA) enrollment periods and boosted subsidies, which helped increase ACA enrollment to 24 million.

Some individuals may face significant increases in their premiums. Due to the limitations of policy changes under the budget reconciliation process, analysts predict that these subsidies could eventually expire.

He also repealed an order directing the Center for Medicare and Medicaid Innovation to explore three drug pricing initiatives: funding Medicaid for gene therapies, reducing Medicare costs for FDA-accelerated drugs, and offering $2 copays for generic medicines.

Medicare changes in 2025 could affect drug pricing and plan structures, potentially raising out-of-pocket costs.

Also Read: F.S.A. vs. H.S.A.: Which Account to Choose for Medical Costs & Tax Benefits - Vola

3. Taxes, Social Security & Lower Credit Card Rates

According to the Tax Foundation, over 60 per cent of taxpayers might see an increase in taxes in 2026 as the provisions in the 2017 Tax Cuts and Jobs Act, or TCJA will expire soon.

Experts also anticipate that one of the major debates will centre around the state and local tax (SALT) deduction currently capped at $10,000. This cap has a significant impact on taxpayers in high-tax states like California, New York, and New Jersey, where top tax rates exceed 10%.

Meanwhile, Trump has also promised to do away with taxes on Social Security income for seniors. While this may sound like a relief for 40 per cent of Americans currently paying taxes on their Social Security, it can be detrimental in the long run.

No taxes means less money going back to the Social Security fund, which might mean fewer benefits for future retirees. Economists have also predicted that this move could potentially exhaust Social Security’s trust fund by the 2030s.

Trump’s proposal for a temporary 10 per cent cap on credit card interest rates could benefit those with outstanding balances. Legislation is likely being drafted to implement the same measure. However, experts warn that such a cap, if enacted, could make it more difficult for people to access credit.

Also Read: Understanding COLA: How Social Security Benefits Keep Pace with Inflation - Vola

4. Private Equities for 401(k) Savings

Financial experts anticipate potential changes to retirement account regulations, including proposals to adjust contribution limits and revise withdrawal requirements for 401(k) plans and IRAs.

Additionally, private equity (PE) firms hope that Trump will be their pathway to tapping the 401(k) savings market. If this move is given a green signal, private equity investments will offer more choices and possibly higher returns.

Presently, the Employee Retirement Income Security Act prevents private equity from gaining access to 401(k)s as these investments often mean higher fees, higher risks, limited liquidity, and less transparency.

How to Negotiate Credit Card Debt: A Step-by-Step Guide

Oct 02,2023 · 4min read · 2634 views

Early in August, the Federal Reserve Bank of New York stated that credit card debt levels have crossed $1 trillion for the first time in America’s history. “Credit cards are the most prevalent form of household debt and continue to become even more widespread,” reads the New York Fed’s blog.

Credit card debt can feel like a never-ending rollercoaster. If you are running behind on credit card payments, there is one way to navigate the crisis. You can negotiate payment terms with the creditor and pay less than your original debt amount.

You've got more power in this situation than you might think! It's time to roll up those sleeves and dive into the world of negotiating your credit card debt like a pro.

Step 1: Know Your Numbers

Before you start any negotiation, gather all the information such as total debt, interest rates, minimum payments, and any fees. This is your starting point, and it's crucial. Study what the other creditors are offering as this may come in handy while negotiating.

Familiarize yourself with the Fair Debt Collection Practices Act (FDCPA) and the Fair Credit Billing Act (FCBA). These acts are here to protect you, so know them well.

Step 2: Consider All Debt Settlement Options

2.1 Workout Agreement

In a workout agreement, you can mutually decrease interest rates, forgo cancellation fees with your creditor or extend the deadline. It can also include lowering monthly instalments and your borrowing limit.

Before working on this agreement, chalk out a realistic timeline and interest rates that are feasible for you. You can even take into account any upcoming promotions, additional incomes and expenditures in the foreseeable future while planning this.

2.2 Lump-Sum Settlement

In a lump-sum settlement, you can settle the debt in one go. You can propose a lower amount of the total sum you are owed if you have that kind of savings. Remember, you can also borrow from your family or friends to settle this debt and repay them later. The only advantage here is you won’t have to pay any interest to your loved ones.

Opt for this option only if you have proof that you can settle the amount in a single payment. If you settle for a lesser amount, you might be considered for a tax. Consult a tax professional before finalising the deal.

2.3 Hardship Plan

You can opt for hardship or forbearance programs if you have gone through a medical crisis, injury, sudden job loss or any other financial emergency. Your creditor will consider reducing your payment or interest fees based on your case.

Please note that not all creditors offer hardship programs.

Step 3: Pick a Negotiating Route

You can either hire a debt settlement company to help you negotiate on your behalf or do it by yourself. If you are on your own you can either write a letter, call your creditor or have an in-person meeting to discuss debt settlement. Keep a record of all the conversations and note down every point for future reference.

Step 4: Lay it All Out

This is your chance to spill the beans. Explain your situation honestly and clearly. Maybe you lost your job, had unexpected medical expenses, or just got a bit carried away with online shopping. Whatever it is, own it and let them know you're committed to finding a solution.

Step 5: Know All Risks

Once the creditor has agreed to negotiate, ask them all the risks associated with the new deal. For instance, in a lump sum agreement, your credit score will suffer or your account will be temporarily frozen. In other cases, may need to pay additional taxes. Discuss what happens if you are not able to go through with the new deal.

Step 6: Get it in Writing

Upon reaching an agreement, make sure you get all the details in writing. This includes the agreed-upon settlement amount, the due date, and a confirmation that the debt will be considered paid in full after the agreed-upon amount is paid.

Step 7: Keep Your End of the Bargain

You've made a deal - now it's time to stick to it! Make sure you pay the agreed-upon amount by the specified due date. This is your ticket to debt freedom, so don't drop the ball now. A few weeks after you've settled your debt, pull your credit report and make sure it reflects the agreement accurately. It should show the debt as "settled" or "paid in full," not as a lingering balance.

Remember, negotiating credit card debt is a skill that takes practice. Don't be discouraged if it doesn't go perfectly the first time. Stay persistent.