Credit card debt forgiveness dos and don'ts to know in 2025

Hopes that the Federal Reserve would resume its interest rate cut campaign, while dim, were eliminated this week after the bank continued to keep its federal funds rate on pause. And while that inaction was largely anticipated, it did little to help borrowers currently saddled with high interest rates on a variety of products. While a cut to that rate would have done little to alleviate the burden being felt by credit card holders, in particular, since rates there are determined largely by the prime rate, it could have at least been a small step in the right direction. Now credit card holders will have to explore alternative ways to tackle their high-rate debt, if they haven't already.

Fortunately, there are multiple debt relief options to consider, with credit card debt forgiveness being one of the most dramatic and easy to understand. But credit card debt forgiveness, also known as debt settlement, shouldn't be approached in a cavalier manner, either, as it can have long-term credit score implications, impacting your ability to borrow money again in the future. In today's unique economic climate, specifically, there are some important credit card debt forgiveness dos and don'ts that borrowers should consider. Below, we'll detail four of them.

Learn how to qualify for credit card debt forgiveness here now.

Credit card debt forgiveness dos and don'ts to know in 2025 

Don't just rush to get started with credit card debt forgiveness, particularly if it's not clear that it will offer the relief you may need now. Instead, start by reviewing these four timely dos and don'ts:

Do: Understand the eligibility criteria

Not everyone will qualify for credit card debt forgiveness. You'll typically need at least $7,500 in outstanding credit card debt, a financial hardship you can clearly document showing inability to repay and already be behind on payments. Additional eligibility criteria may apply depending on the debt relief servicer. So, understand the exact qualifications before applying. If you don't closely meet all three, you may find it more effective and less time-consuming to explore alternatives, particularly now knowing that significant interest rate relief has again been pushed off.

Explore your top debt relief options online today.

Don't: Ignore alternatives

Credit card debt forgiveness is understandably considered a top debt relief option thanks to its ability to potentially eliminate up to 50% of your existing credit card debt. But it's not the only option, and possibly not even the most applicable one to consider now. Debt management programs can be particularly helpful for those struggling with their monthly credit card payments. 

A debt consolidation loan or debt consolidation program can get your credit card paid off at a potentially much lower interest rate, saving you both time and money. On the other end of the spectrum, bankruptcy could be the most effective way to finally eliminate your credit card debt, even if means a long-term impact on your credit score. You won't know which is optimal, however, until you've closely inspected and compared all alternatives.

Do: Understand the timeline

If you've met the credit card debt forgiveness eligibility requirements and have determined that this is the top relief option for your needs now, then you're two steps closer to having your credit card debt forgiven. But those are just two steps in what is likely to be a multiple-year journey as most credit card debt forgiveness programs erase a portion of your debt within two to four years. And that's on the assumption that you don't grow your debt further during that time frame. Understanding this timeline is critical, however, as it gives you something to compare against versus waiting for the economic climate to improve and taking a do-it-yourself approach.

Don't: Wait to tackle your debt any longer

Ultimately, whatever debt relief course you choose, it's important not to delay action any further. Delaying tackling your debt comes with serious repercussions that could have long-lasting impacts on your financial health. And, in the economic climate of March 2025, with interest rates still elevated, inflation sticky and stock market uncertainty prominent, waiting for a perfect solution to a growing problem doesn't make sense. Whether it's credit card debt forgiveness, debt consolidation loans or some other option (or a combination of multiple ones), what's important is taking action now.

The bottom line

To make any debt relief strategy work, those suffering from excessive debt should first familiarize themselves with the dos and don'ts of each unique approach. By being aware of the credit card debt forgiveness dos and don'ts of early 2025, cardholders can determine if this is the right move for them and, if it is, they can then use this knowledge to develop an enduring and ultimately successful debt relief technique. But the work should start now, before additional debt accrues and compound interest makes it even harder to pay down what you already owe.