Credit card debitIt’s a common financial problem that many Americans face. This debt can add up quickly due to high interest rates, making it difficult to pay off the balance. As interest increases, total debt increases, creating a cycle that can be difficult to break. Many people rely on credit cards for convenience or to cover expenses, but without careful management, debt can spiral out of control. However, if you find yourself saddled with extreme credit card debt, you may be eligible for credit card debt forgiveness.

Credit card debt is a major concern for many Americans

As of the second quarter of 2024, total credit card debt in the United States was $1.142 trillion. This is the largest amount of debt ever recorded by the Federal Reserve Bank of New York and an increase of almost 6% from last year. With the cost of living hitting an all-time high this year, many Americans are relying on credit cards to cover basic expenses, even if they don’t have sustainable access to paying the amount they borrow.

In 2023, the average credit card debt owed per household was $8,599. Responsible use of credit cards involves paying the balance you owe at the end of each month. Although debt can be a strategic tool for creating wealth in terms of real estate and certain investment opportunities, it requires discipline and informed knowledge on how to use debt as a lever of power. The average American who buys on credit does not use credit in this way, and responsibly relying on paying off debt at the end of each month is a much more sustainable approach to credit.

No government program erases credit card debt

It’s important to note that there are no government programs or funding to help people with credit card debt. However, if you have accumulated a significant amount of credit card debt, there are steps you can take to get some or all of that debt forgiven by the creditors you borrowed money from. Plus, almost everyone could benefit from some sort of credit card debt forgiveness from creditors. Creditors often conclude that it is more cost-effective to cancel part of the debt rather than pursue full repayment, especially if the debtor is unable to pay the entire amount.

Debt Settlement Programs are one such option that you can pursue to get your credit card debt canceled. These programs are services or strategies designed to help individuals reduce or eliminate unsecured debt by negotiating directly with creditors to accept less than the total amount owed. These programs play a crucial role in helping individuals settle credit card debt that may seem extremely impossible to pay off.

The debtor typically enrolls in a debt settlement program through a third-party company or organization, often with a fee-based structure. The individual will stop making regular payments to their creditors and instead deposit money into a dedicated account managed by the settlement company. This account accumulates funds over time, which will eventually be used to pay off debts.

Debtors can declare bankruptcy

If your credit card debt is impossible to pay off, you may need to file an application bankruptcy. This is a legal procedure that provides total debt relief, but also carries significant financial consequences and long-term implications. Your credit score will be seriously affected and will often prevent you from purchasing anything on credit for the next seven to ten years. This includes applying for home or car loans. However, it is often the only choice individuals have when it comes to paying off debt, and a reduced credit score is often worth more than thousands of dollars in debt.