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A new month always offers the possibility of change. And for millions of Americans suffering under the burden of high-rate credit card debt, change could be very welcome right now. With the average credit card interest rate north of 21% now, the average credit card debt amount close to $8,000 and the ability to pay off what’s owed hampered by inflation and higher borrowing costs, many be looking to their debt relief options now.
One such alternative worth exploring is credit card debt forgiveness. This debt relief type, for borrowers who qualify, can result in 30% to 50% of the outstanding debt load being forgiven. But it won’t happen quickly and there will be a process borrowers will need to complete to ultimately see their balance cut down. It behooves these savers, then, to be proactive.
But does that mean credit card debt forgiveness makes sense to pursue this July, specifically? For many borrowers, this month can be the smart time to take action. Below, we’ll detail four reasons why.
Start by checking your credit card debt forgiveness qualifications here.
4 reasons why credit card debt forgiveness is worth it this July
Here are four reasons why credit card debt forgiveness could be worth exploring this month:
Because rate cuts are unlikely to be issued this month
There’s less than a 5% chance that the Federal Reserve will slash interest rates when it meets again at the end of July, according to the CME Group’s FedWatch tool. A frozen federal funds rate, then, will do nothing to help reduce the rates you’re already paying on your credit cards. And with no Fed meeting slated for August, waiting for relief here is likely not worth it for most borrowers already struggling to make minimum payments.
Explore your credit card debt relief options now and get started today.
Because your interest is compounding in the interim
If you’ve carried a credit card balance past the initial grace period (often 21 to 25 days), then the interest on that balance is compounding. So, not only do you owe what you first borrowed, but you owe interest on it and interest on the balance and initial interest and so on, quickly leading to a debt spiral that will be difficult to break free of without the help of professional debt relief services. This is why making minimum payments does little to address the root balance problem. Instead, consider exploring your credit card debt forgiveness options now to stop this cycle once and for all.
Because rate cuts, when issued, will offer minimal relief
Flash forward to September, when Fed rate cuts are presumably issued. Many experts only expect a 25 basis point reduction from the current range between 4.25% and 4.50% to 4.00% and 4.25% at that point. And since the Fed’s rate actions are only one component that affects credit card interest rates, this presumed reduction will offer minimal relief for those stuck with high-rate credit card debt – if it even shows up at all. Waiting for this to occur, then, especially when credit card debt forgiveness is readily available now, is simply not worth it.
Because your overall financial health is suffering
A big credit card bill that you have to get creative to pay each month isn’t an isolated incident. High-rate debt can also impact your credit score, making it harder to qualify for additional credit on items like personal loans, auto loans, mortgages and even rent or car leasing. So, while it may seem like your credit card debt is a singular issue, the ripple effect across your financial life can be profound. Understanding this, borrowers may want to take the delayed action of working toward having a portion of their debt forgiven, which can have the extended effect of improving their overall financial health over time, as well.
The bottom line
The above reasons supporting the case for credit card debt forgiveness this month are four major ones but they’re not the only reasons why this unique debt relief technique may be worth it for you right now. Consider reviewing your financial goals, circumstances, ability to pay and budget to better determine if forgiveness is applicable to you or if another strategy fits more appropriately. The key, after all, no matter the path you ultimately choose, is to reduce your debt load significantly on the road toward total financial independence.
