3 credit card debt relief strategies to consider for 2025

As Americans grapple with unprecedented credit card debt levels heading into 2025, finding effective relief strategies has become more crucial than ever. Recent Federal Reserve data shows credit card balances surpassed $1.17 trillion in the third quarter of 2024, up from $1.14 trillion the prior quarter, with the average household now carrying nearly $8,000 in credit card debt. This financial burden has been exacerbated by card interest rates climbing to historic highs, with the average credit card APR now exceeding 23%.

Part of the issue is that the lingering high prices due to years of inflation have stretched many household budgets thin and created a perfect storm for credit card debt accumulation. Many households have had to rely on credit cards to weather these financial challenges, but are now trapped in a cycle of minimum payments and mounting interest charges. As a result, traditional debt management approaches, like paying off your balance monthly or using the debt snowball or avalanche methods, may no longer be sufficient.

Luckily, those aren't the only approaches that those seeking to break free from credit card debt in 2025 can take. There are a few other options that deserve consideration, and if you're dealing with this type of issue, understanding these alternatives can help you make informed decisions about your financial future. 

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3 credit card debt relief strategies to consider for 2025

The debt relief approaches outlined below could come in handy as you prepare for the challenging economic landscape ahead.

Streamlining multiple debts with debt consolidation

Debt consolidation is one of the most straightforward approaches to managing high-rate credit card debt, and this type of debt relief is generally available in two primary forms: traditional debt consolidation through banks, credit unions and other lenders and debt consolidation programs offered through debt relief companies. 

With traditional debt consolidation, the goal is to take out a new loan through a traditional lender, typically with a lower interest rate, to pay off multiple credit card balances. This strategy allows you to roll multiple credit card balances into one loan, streamlining and lowering your payments, and it can be particularly effective for borrowers with good credit scores who qualify for loans with rates significantly below their current credit card rates.

Debt consolidation programs, on the other hand, provide a structured approach to debt consolidation. These programs function similarly to traditional debt consolidation, but the main difference is that you're borrowing money via a debt consolidation loan through the debt relief company's third-party partner lenders. These lenders tend to be more experienced in working with borrowers who have a few blemishes on their credit, so they may be more flexible in terms of borrowing requirements. 

Find out how the right debt relief strategy could benefit you now.

Getting professional guidance and structure with debt management

Debt management programs, which are offered through credit counseling agencies, are a comprehensive solution for those struggling with credit card debt. These programs provide professional financial guidance to you while working directly with your creditors to reduce interest rates and establish manageable repayment terms. When you enroll in this program, you're typically required to close your credit card accounts and make a single monthly payment to the counseling agency, which then distributes the funds to your creditors.

The structured nature of this type of program helps ensure consistent progress toward debt elimination while providing valuable financial education and budgeting support. Most plans also aim to eliminate debt within three to four years, making them an attractive option for those committed to long-term financial recovery. So if you start this process early in 2025 and stick with it, you'll be on your way to becoming debt-free in just a couple of years.

Settle your debts for less than you owe with debt forgiveness

Credit card rates have steadily climbed over the last decade, and it's likely they'll remain high throughout 2025 — no matter what happens with the overall rate environment. As a result, credit card debt forgiveness, also known as debt settlement, could be the best route to take next year for severely overwhelmed borrowers. This approach involves negotiating with creditors to accept less than the full balance and typically results in 30% to 50% of the original debt being forgiven. 

You can pursue debt forgiveness on your own, but many people opt to work with debt relief companies instead, as the experience they offer comes in handy during negotiations. Note, though, that this strategy does have some downsides, like credit damage and tax repercussions. There's also no guarantee that you can settle your card debt for less than what you owe, as card issuers aren't required to negotiate. But if successful, it can offer serious relief from credit card debt.

The bottom line

As credit card rates continue climbing, many borrowers may need to consider more aggressive approaches to their card debt. Debt consolidation, debt management and debt forgiveness can all be worth considering, but the choice between these strategies often depends on factors such as total debt load, income stability, credit score and long-term financial goals. Whatever strategy you choose, though, addressing your credit card debt proactively is typically the key to long-term financial health.