3 Big Reasons to Consider Credit Card Debt Forgiveness in August

Currently, the average American has about $7,950 in credit card debt. And while this type of high-interest debt is never ideal, it can become even more of a problem in today’s economic environment. Finally, credit card interest rates have been increasing recently, and if you don’t pay off your balance each month, interest fees can add up quickly. This can lead to high minimum payments that can be difficult to maintain.

This isn’t the only problematic credit card statistic making headlines right now. Recent reports suggest that today’s high average credit card balances, along with an increasing number of maxed out credit card accounts and delinquent credit card payments, mean that many people are struggling to pay off their debts in today’s economic climate.

If you’re one of them, the good news for you: there are debt relief options available to help you eliminate credit card debt, including credit card debt forgiveness. The goal of credit card debt relief is to pay off a portion of your outstanding credit card balance. And this debt relief option may be worth considering, especially in August.

3 Top Reasons to Get Credit Card Debt Forgiveness in August

Here are some top reasons you should seek credit card debt forgiveness in August:

High Interest Rate Environment

In today’s high interest rate environment, the average interest rate on a credit card is now at nearly 22%. As interest accrues on your balance, it can become increasingly difficult to pay off your debt.

For example, if you have a credit card balance of $6,500 with a 22% annual interest rate and you only pay the minimum payment each month (interest plus 1% of the balance), it will take you approximately 307 months to pay off your debt. During that time, you will pay an additional $11,276.54 in interest.

With interest rates currently high, it’s important to eliminate your credit card debt as quickly as possible. Otherwise, you could end up paying much more interest than your original balance.

Inflationary Pressures Continue

Inflation has fallen from recent highs but is still out of control. The current inflation rate is 3%, still above the Federal Reserve’s 2% target. And as prices of necessities like food, housing, and fuel continue to rise, many Americans have less funds to pay off their debts.

Canceling your credit card debt can help here. Paying off your debt for less than you owe could free up funds to deal with today’s rising costs while paying off your outstanding debt.

Possible Debt Reduction

When you seek debt reduction, your goal is to get your creditors to accept a lump sum payment to pay off your debts for less than what you owe. If this process is successful, it can lead to significant savings and get you out of debt much faster than you would otherwise.

For example, some debt consolidation companies report being able to reduce your debt by 50% or more. While results can vary widely, even reducing a $7,500 balance by 30% would save you about $2,250. This could mean the difference between being able to work out a manageable debt repayment plan or experiencing years of financial hardship.

Conclusion

There are plenty of debt repayment options you can consider in August, but if you’re struggling with huge amounts of debt, credit card debt reduction may be especially appealing. Ultimately, this option can lead to significant savings and shorten the overall repayment process, so it may be worth taking advantage of if you can’t pay off your debt on your own.

That being said, there are plenty of debt resolution options you can consider. In some cases, it may make more sense to pursue debt consolidation or enter a debt management program instead. So make sure you understand the options available to you and weigh the potential pros and cons of each option before making a decision.