Credit card debt forgiveness mistakes to avoid this April

Credit card debt can feel like an inescapable issue, as making the minimum payments each month tends to have minimal impact on a balance — in large part because of compounding interest. For many cardholders, growing credit card debt has become a constant reality, as evidenced by credit card debt reaching a record high of $1.21 trillion late last year. Serious credit card payment delinquencies (accounts with payments that are 90 days or more days past due) also increased in the fourth quarter of 2024, indicating that cardholders are struggling to balance their regular expenses and their debt payments.

The financial strain that many cardholders feel right now likely won't end soon, either. While inflation fell slightly in February, the cost of consumer goods is still climbing and the inflation rate is nearly a percentage point above the Federal Reserve's goal. The Fed also decided during its March meeting to keep its benchmark rate the same for now rather than lowering it — which likely would have reduced the cost of borrowing across various types of loans. 

That means there's likely no reprieve coming in terms of lower borrowing costs this April, so your credit card debt likely won't get any cheaper in the near future. However, certain debt relief options, like credit card debt forgiveness, could be a way to better tackle your revolving debt. When you pursue credit card debt forgiveness, you typically work with a debt relief company to try and settle your debt for less than what you owe, reducing your balances by 30% to 50% on average.

Keep in mind, though, that credit card debt forgiveness can be tricky to navigate, and there are a few big mistakes you should avoid making right now. Here are a few big missteps to avoid if you plan to take advantage of debt forgiveness this April.

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Credit card debt forgiveness mistakes to avoid this April

Before you start the debt forgiveness process this April, make sure you're avoiding these big mistakes:

Assuming interest rates will fall this April, making debt less expensive

While you may be hoping your credit card interest rates will fall in April, it's unlikely that will happen. Credit card rates are set based on the prime rate, and other factors, including Fed rate changes, competition between issuers, changes in the regulations for credit cards and borrower risk help dictate where these rates head. 

So, with no Fed meeting slated this April and a lot of uncertainty about where the economy is headed, card issuers are unlikely to lower credit card rates from today's record average of 22.80%. So, if you're waiting until this April to see if card rates drop before signing up for debt forgiveness, you may just be giving your card debt more time to grow. Taking action now, though, can put you on a path toward settling your debt for less and eventually becoming debt-free. 

Start tackling your high-rate credit card debt now. 

Making minimum payments early

You may think that staying current on your credit card payments or making your minimum payment early will reflect well on you when pursuing credit card debt forgiveness this April. However, making your payments early, or even on time, can actually hurt your chances of debt forgiveness.

That's because card issuers are typically more likely to settle debts for less when you're behind on their payments, as they know they're much less likely to receive any payment if you file for bankruptcy or default completely. Therefore, it may not make sense to pay your credit card bills early if you plan on pursuing debt forgiveness this April, as it could prolong the settlement process and extend the debt forgiveness timeline.

Not shopping around for debt relief servicers 

Many debt relief companies offer credit card debt forgiveness; there's no shortage of options. But if you choose the first debt relief company you come across, you could find yourself in a frustrating situation.

Generally speaking, the requirements for enrolling in a debt forgiveness program differ from one debt relief company to the next, so while one company may not work for you, another may be a much better fit. You won't know that, though, unless you're shopping around. 

For example, some companies only take on borrowers with at least $7,500 in credit card debt, while others require a minimum of $10,000 in credit card debt. Or, you may find that certain companies have lower fees than others, while some options may not be available in your state. Ultimately, comparing your options can help you find the best servicer for your financial situation. 

The bottom line

Credit card debt can be tough to control in today's high-rate landscape, but credit card debt forgiveness could help you lower the total amount you owe, making it easier and more affordable to tackle this type of high-rate debt. Before you choose a debt relief servicer, though, make sure you're well aware of the big mistakes that you could make when pursuing this type of debt relief right now. That way, you can optimize your chances of getting rid of your high-rate debt and ensure that you're on the right path to tackling your expensive debt issues once and for all.