How to improve your chances of credit card debt forgiveness
As inflation climbed to its highest point in more than four decades in mid-2022, the Federal Reserve began increasing its target federal funds rate to try and temper it. Rate hikes then became the norm until the Fed paused rate hikes at a 23-year high in late 2023.
The federal funds rate forms the foundation for consumer interest rates, so you may have felt the impact of the rate hikes when opening your monthly credit card statements. And with interest charges causing your credit card balances to grow, it may be more difficult to make ends meet now than in the past.
But if you're struggling to make your credit card payments, credit card debt forgiveness programs may be able to help. And, while there are no laws requiring your credit card issuers to forgive a portion of your debt, there are ways to improve your chances of that happening.
Find out how quickly credit card debt forgiveness programs can help you get out of debt now.
How to improve your chances of credit card debt forgiveness
Here are a few ways to increase your chances of having a portion of your credit card debt forgiven.
Work with a reputable provider
Credit card debt forgiveness experts have a valuable skill, as most credit card companies won't simply forgive a portion of your debt on their own. This type of forgiveness typically happens as a result of negotiations.
As such, it can benefit you to have an expert negotiator on your side when you seek credit card debt forgiveness. So, you should only work with debt forgiveness or debt settlement companies that have good reputations.
"To find a trustworthy settlement company you will have to educate yourself," says Dawn-Marie Joseph, founder of Estate Planning & Preservation. "Don't just go with the first one that you call. Ask them how they work with your outstanding credit cards and how they negotiate terms."
"You can also look up companies online to see what their ratings are in their industry," Joseph says.
Compare credit card debt forgiveness providers today.
Make a reasonable settlement offer
Creditors may forgive a portion of what borrowers owe if they believe there's a low probability of collecting the debt as agreed — or a high probability of the borrower filing bankruptcy. But they're unlikely to accept a lowball offer, such as a $10 offer on a $1,000 debt.
If you attempt to settle the debts on your own rather than utilizing a debt forgiveness service, be sure to make reasonable settlement offers. For example, you can start by offering to pay 50% of what you owe to clear the debt and then negotiate from there.
Be honest with your debt relief provider and your creditors
Bear in mind that you, your debt relief provider and your creditors all have the same goal: to resolve the debt as quickly as possible. So, it's important to be honest with all parties involved.
For starters, your debt relief provider may ask questions about your financial situation — and it may be uncomfortable to admit that you're not making ends meet, but your debt forgiveness experts are there to help. And they'll need honest answers to do so.
Your debt relief provider will also typically alert your creditors that you've enrolled in a debt forgiveness program, so you may get fewer calls about what you owe. However, if any creditors do call, it's important to be honest with them as well. Explain that you have enrolled in a debt relief service, give them the name of the company you're working with and offer contact information for the debt relief service you're using.
If you are working to settle your debts on your own, let your creditors know that when they call. Explain that you're struggling financially and are currently saving in an attempt to settle your debts. Doing so may open the door to assistance programs offered by the card issuer. Ignoring creditor phone calls, though, could lead to further actions.
The bottom line
Credit card debt forgiveness can make it easier to pay off your credit card debt, but working with a reputable debt relief provider can improve your chances of achieving credit card debt forgiveness. If you choose to negotiate settlements on your own, start by making reasonable settlement offers. And, in either case, be honest about the situation to help improve your odds of successful debt forgiveness.
