Full Article: 3 reasons to pursue credit card debt forgiveness this June, according to experts
Credit card debt remains a serious financial burden for many Americans — even as inflation has cooled slightly in recent months. With average credit card interest rates sitting well above 21% and overall balances topping $1.18 trillion (a 6% increase from last year), paying off high-rate debt is becoming increasingly difficult. Add in the rising cost of living, and even proven strategies like the snowball or avalanche method may not be enough for some borrowers.
For those deeply in debt, credit card forgiveness — where a creditor agrees to settle your debt for less than what’s owed — may be worth considering. But is now the right time to pursue it?
Here are five key takeaways from the article “Why you should pursue credit card debt forgiveness this June, according to experts”:
Credit Card Rates Are High — and Not Dropping Soon
Interest on credit cards remains historically elevated and doesn’t typically fall in line with Federal Reserve rate cuts. Even if the Fed lowers rates later this year, credit card APRs are unlikely to follow quickly or significantly.
“When the Fed starts cutting, credit card rates are usually the last to come down,” says Stephan Shipe, a flat-fee financial and investment advisor at Scholar Financial Advising.
Forgiveness Takes Time — So Start Now
Credit card forgiveness isn’t an overnight fix. According to experts, the process can take 24 to 48 months, sometimes longer. Starting early helps avoid additional compounding interest and worsening debt. Waiting could mean sinking deeper into a financial hole.
It’s Less Damaging Than Bankruptcy
While forgiveness will affect your credit, it’s generally less harmful than defaulting or filing for bankruptcy. Bankruptcy can remain on your credit report for up to 10 years and may involve wage garnishment. Forgiveness shows future creditors that you made an effort to resolve your debt responsibly.
Consider It a “Second-to-Last Resort”
Forgiveness is not a decision to take lightly. It’s typically reserved for borrowers who have exhausted other repayment options and still can’t keep up.
Shipe emphasizes that forgiveness should only come into play before bankruptcy:
“It should not be entered into lightly.”
The Sooner You Act, the More You Save
Delaying action on high-interest debt can cost you significantly over time. The longer you wait, the more interest compounds. If you’re paying more than 20% in interest, each day of inaction adds to the cost of your debt — making relief options harder to access later.
If your credit card debt feels unmanageable, forgiveness might be a viable solution — especially when compared to the long-term consequences of default or bankruptcy. But it’s crucial to act early, understand the trade-offs, and view it as a last step before more drastic financial measures.