Credit card debt relief: where to start
Review interest, hardship options and repayment strategies before comparing a credit card debt settlement referral.
If your credit card payment is becoming unaffordable, contact the issuer early and ask about hardship options. Then compare repayment, counseling and other approaches using your actual balance, APR and budget.
Read the numbers that drive the balance
Gather the current balance, purchase APR, minimum payment, interest charged and due date. A card can contain balances with different rates, such as purchases and cash advances. Check when promotional rates expire.
Use the calculator to explore the effect of a consistent payment with no new borrowing. It is a simplified illustration, so compare its assumptions with your agreement. A minimum payment can change from month to month.
Sources: CFPB: When you cannot pay your credit card bills · FTC: How to get out of debt
Prepare for a hardship conversation
Explain why you are having trouble, what you can afford and when you expect the situation to change. Ask the issuer what options are available before committing to another product or service.
You could say: My required payment is no longer affordable. I can currently pay this amount after essential expenses. What hardship arrangements can you consider, and how would they affect interest, the account and reporting?
- Request written terms and the date any temporary relief ends.
- Ask what happens if you cannot keep the arrangement.
- Keep a record of the call and any confirmation.
If you can pay extra, give it a purpose
After covering required payments, you can direct extra money toward the smallest balance or highest APR. Choose a method you can sustain without needing to borrow again for essentials.
At a simplified monthly rate of 24% APR divided by 12, a $10,000 balance starts with about $200 in monthly interest. A $300 payment reduces principal by about $100 before new purchases or fees. Actual issuer calculations can differ.
Sources: FTC: How to get out of debt
If repayment still does not fit
Compare nonprofit credit counseling, a consolidation loan if appropriate, and the risks of settlement. A new loan leaves you owing a new lender; settlement seeks creditor agreements and is not guaranteed.
Done With Debt can review an inquiry about potentially eligible unsecured credit card debt. An independent provider makes the final acceptance decision. We do not guarantee savings or negotiate with creditors ourselves. Residents of Arkansas, California, Hawaii, Louisiana, New Jersey, North Carolina, Oregon or Wyoming are not eligible for services through us.
Sources: FTC: How to get out of debt · CFPB: Comparing debt relief approaches
Sources and further reading
- CFPB: When you cannot pay your credit card bills
- FTC: How to get out of debt
- CFPB: Comparing debt relief approaches
General educational information. This guide does not assess your circumstances or replace financial, legal or tax advice. Read our editorial policy.