Stuck with credit card debt in today's economy? Don't do this.

Consumers with credit card debt find themselves wrestling with how to handle their debt in an economy that's been hard to predict lately. Inflation fell in February after four straight months of increases, yet there's no guarantee the decline will continue in March (the next report will be released on April 10). Interest rates have been on pause for several months now, allowing savers to take advantage of relatively high rates for certificates of deposit (CDs). However, it's hard to tell where rates will go, in part, because of uncertainty about the economy, an uncertainty that was punctuated by the stock market suffering its biggest one-day drop since 2020 this week.

Amid all of these factors, a recent Fed report revealed that consumers are carrying more credit card debt than ever before, and the number of accounts that are 90 days late or more is up year-over-year. Additionally, credit card rates remain high, meaning consumers with credit card debt are facing hefty interest charges.

Trying to figure out what action to take about your credit card debt can be a difficult task under any economic circumstances, let alone the complex ones consumers are facing today. With so many financial factors at play right now, knowing what not to do with your credit card debt can be just as important as laying out action steps to clean up your debt.  

Take the first step in finding a solution for your credit card debt here now. 

What not to do if you have credit card debt in today's economy

Avoiding the following three things will help you manage your credit card debt successfully in today's economy. 

Wait for rates to fall before you make decisions about your balances

Generally speaking, trying to time the market, whether it's interest rates or stock prices, is never a good idea. That's especially true for credit cards, as their interest rates are tied to the prime rate instead of the Fed's benchmark rate. For example, the Fed's rate pause means that rates for personal loans and home equity loans, which are tied to the Fed rate, are likely to stay relatively stable right now. The same isn't true for credit cards. So, while some financial products may see their rates remain relatively steady or even drop right now, your credit card rates may go in a different direction.

If you're trying to make credit card debt decisions based on where you think rates are headed right now, it's best to adjust your approach and consider other factors, as the time you lose waiting on rates to decline could be time you spend finding a solution for paying down your credit card debt.

Get started with credit card debt relief today. 

Avoid seeking help managing your debt

If you're struggling to keep up with or are falling behind on your credit card payments, you may feel frustrated and trapped. Asking for help may be something you've avoided out of embarrassment, shame or lack of time. However, trying to solve your credit card debt problem on your own without help will likely cost you money, stress and more frustration.

There are multiple resources available to help you corral your credit card debt. Credit counselors can work with you to get a clear picture of your financial situation and help you make a budget that can rein in your spending. If you qualify, your credit counselor may also be able to enroll you in a debt management program that can lower your credit card debt's interest rate and bring all your accounts under one payment. 

Additionally, debt relief companies offer credit card debt forgiveness plans in which they negotiate with your creditors to lower the amount you owe, typically by 30% to 50%, assuming you qualify. 

Each of these programs can provide significant help in a time when relief from high interest rates and credit card balances can provide critical financial freedom.

Assume you don't qualify for credit card debt forgiveness

If you've spent time researching ways to pay down your credit card debt, you may have come across credit card debt forgiveness programs and thought you wouldn't qualify for them because your situation wasn't severe enough or for another reason. However, the requirements are relatively simple, making credit card debt forgiveness available to more borrowers than you might think: 

• You're behind on payments.
• You have a financial hardship that prevents you from paying off your credit card debt.
• You have at least $5,000 to $10,000 in credit card debt.

If you choose to apply for credit card debt forgiveness, you'll need to prepare for qualification by gathering your credit card statements, bank information and evidence proving a financial hardship. 

While your credit score is likely to take a hit once you start your debt forgiveness program, the peace of mind you gain right now from gaining control of your debt may be worth the drop in your score. Additionally, there are multiple ways to rebuild your credit after you complete a credit card debt forgiveness program.

The bottom line

With today's credit card debt levels and interest rates where they are, carrying credit card debt in the current economy is difficult. If you feel like your debt has shifted from something you control to something that controls you, it may be time to get help from credit card debt forgiveness or a debt management plan. That noted, these programs have pros and cons you'll need to weigh, including timeframes — debt relief solutions aren't quick. Credit card debt forgiveness programs tend to last two to four years, while debt management plans usually take three to five years.