That's according to a new report from the Bureau of Labor Statistics, showing the rate at 3.3%, the highest it has been in multiple years.
uncertain
it → accord → years
That's left food prices, as well as other basic living expenses, running substantially higher than they were just a year ago.
asserted
they → leave → prices
That combination of issues has left millions of Americans just to cover the basics.
asserted
combination → leave → basics
So, while carrying a balance used to be an occasional inconvenience, it's increasingly becoming a way of life for many borrowers.
asserted
it → carry → borrowers
With credit card interest rates over 20%, however, and daily, this can be a financially risky approach to take.
But there's a point at which carrying a balance tips from manageable to genuinely dangerous — typically when
start to feel out of reach, and interest charges are outrunning any real progress on the principal.
asserted
charges → take → principal
That's when borrowers often start asking about , which is a process that involves negotiating directly with a creditor or debt collector to settle an account for less than what's owed.
asserted
what → start → less
If successful, a reduced lump-sum payment closes out the debt entirely.
asserted
payment → close → debt
That can sound like a lifeline, and for some people it is.
asserted
it → sound → people
It can damage your credit score and complicate future borrowing.
asserted
It → damage → borrowing
So, before you decide on this path, it's worth understanding both what it offers and whether you're the right type of borrower to take advantage of it.
asserted
you → decide → it
Who qualifies for credit card debt forgiveness?
asserted
Who → qualify → forgiveness
When it comes to credit card debt relief, it's important to dispel a common misconception: There are no government-sponsored programs specifically designed to eliminate credit card debt.
asserted
it → come → debt
So, you should be wary of any offers claiming to represent such government initiatives, as they may be misleading or fraudulent.
uncertain
they → claim → initiatives
However, this doesn't mean that credit card debt forgiveness is entirely out of reach.
asserted
forgiveness → mean → reach
While not backed by the government, certain types of credit card debt forgiveness do exist.
asserted
types → back → forgiveness
While it's highly improbable that a credit card issuer would completely erase your debt outside of bankruptcy proceedings, you might have the option to negotiate with your creditors for a partial reduction of your outstanding balance.
uncertain
you → erase → balance
How to get your credit card debt forgiven
There are a couple of ways to get your debt forgiven by credit card companies.
asserted
debt → get → companies
Those include:
Debt settlement programs
.
asserted
Those → include → programs
At the start of the program, a debt relief expert will typically analyze your debts and financial position.
asserted
expert → analyze → debts
Using this information, the expert will create an affordable, effective payment plan.
asserted
expert → use → plan
When you make your payments to the debt settlement company, they generally hold the money in a special-purpose savings account.
asserted
they → make → account
Once you've saved enough money to settle your debts, the debt settlement company starts negotiating with your creditors in hopes of reducing your principal balance.
asserted
company → save → balance
These negotiations are often successful, resulting in significant long-term savings.
asserted
negotiations → result → savings
For starters, debt settlement companies do not make payments to your creditors as you save for your settlement.
asserted
you → make → settlement
That will likely hurt your
and impact the ability to borrow for some time.
asserted
That → hurt → time
Moreover, there's no guarantee that your credit card company will accept the settlement.
asserted
company → be → settlement
If they don't accept it, you could end up with a larger debt burden than you started with, and if they do, you'll likely need to pay income taxes on the amount of debt that was forgiven.
uncertain
that → accept → debt
If credit card debt settlement doesn't provide enough relief, it may be time to reach out to a bankruptcy attorney.
uncertain
it → provide → attorney
Sure, bankruptcy will likely harm your credit score and ability to borrow in the near term, but as a last resort, it's often
.
asserted
it → harm → resort
You may be able to get your debt 100% forgiven through bankruptcy, giving you the ability to restart on a clean financial slate.
uncertain
debt → get → slate
Debt settlement programs and bankruptcy both have the potential to result in forgiven debt, but they're also likely to have a significant impact on your credit score and your ability to borrow.
asserted
they → have → score
- Debt consolidation loan: You may be able to take out a to .
uncertain
You → take → to
These loans usually come with fixed payment schedules, offering a clear path to payoff.
asserted
loans → come → payoff
- Use your home equity: Home equity is a relatively inexpensive way to access cash when you need it, and the .
asserted
you → use → it
- Debt management programs: Under these programs, debt relief experts use your financial data to and create payment plans to help you pay your debts off faster.
asserted
you → use → debts
- Financial hardship programs: Many credit card companies offer that could offer relief through lower interest rates and fixed payment terms.
uncertain
that → offer → rates
Signing up for these programs is often as simple as calling your lenders and asking for help making your payments more manageable.
asserted
payments → sign → help
The bottom line
Credit card debt can be overwhelming, but you don't have to deal with it forever.
asserted
you → have → it
If debt consolidation loans are unavailable and debt management programs don't offer enough relief, it may be wise to use a debt settlement company to try and get a percentage of your debt forgiven.
uncertain
percentage → offer → debt
But if debt settlement doesn't provide enough relief, it may be time to file bankruptcy and restart on a clean financial slate.
uncertain
it → provide → slate
…and 1 more, not listed.
The Aporia
