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Guide to Credit Card Debt Relief

6 min read
Last Updated: June 10, 2025
Using your credit card

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Key Takeaways

  1. Credit card debt relief services may help make debt repayment more manageable.

  2. When deciding on a debt relief program, consider what you owe, if you can pay it back, your current interest rates, and potential fees.

  3. Credit card debt relief can impact your credit and your ability to get credit in the future.

If you’re struggling with credit card debt, a credit card debt relief program might help. These debt relief programs can help you reduce or pay off your outstanding credit card balances.

 

There are several types of debt relief programs. The one that’s right for you depends on the amount of debt you have, your credit score, and whether you can repay the full amount.

When to pursue credit card debt relief

Are you struggling to make the minimum payment on your credit card bills? Or dealing with mounting late fees from credit card companies? Are you getting debt collection calls? Do you feel like you can’t come up with an effective debt repayment plan on your own?

 

If you answered “yes” to any of these questions, it might be a good idea to speak to a professional about credit card debt relief.

Credit card debt relief programs

There are a variety of debt relief programs available. Each has specific considerations. Knowing your options can help you make the right choice for your particular situation.

Debt consolidation

When you take out a debt consolidation loan, you use the money from that loan to pay off most or all of your debts. Then you pay back that loan over time. If the loan has a lower interest rate than your previous debts, you’ll save money on interest. You’ll also have a single monthly payment, possibly making your debt easier to manage.

You may get better terms on a debt consolidation loan if you have a good credit score. However, even if you don’t have great credit, it might be worth applying to see if a loan could help you pay off your credit debt.

Remember that debt consolidation doesn’t provide credit card debt forgiveness. You’re still responsible for the entire sum of your balances.

 

Want to see what you could save by consolidating your debt? Try the Discover debt consolidation calculator to get an estimate.

Debt settlement

Debt settlement is the process of negotiating with a credit card issuer to potentially pay less than you owe. You can reach out to your credit card issuer directly to talk about debt settlement.

 

If the credit card company agrees, you’ll make a payment agreement. You may agree on a single, lump-sum payment or another type of payment plan. At the end of the settlement agreement, and once you’ve paid the agreed-upon amount, the issuer will forgive the rest of your debt.

A debt settlement may save you money on interest or by reducing the total amount that you owe. But debt settlements hurt your credit, and that can cost you money in the long run. You might get higher interest rates on your credit cards and loans in the future, for example. There may also be tax implications that add costs.

It’s a good idea to talk with a tax professional or financial advisor if you’re considering debt settlement. A non-profit credit counseling service may be able to guide you through your debt settlement options.

 

Be aware that there are also debt settlement companies that negotiate with creditors for you, but the Federal Trade Commission (FTC) warns that there are risks to this option. These companies may target people in debt and often charge 15% or more of the amount of the debt that’s settled. There’s also no guarantee that they can get you a debt settlement agreement.

It’s best to try to settle with your credit card issuer directly or contact a credit counseling service before even considering a third-party debt settlement company.

Balance transfer

A balance transfer lets you move debt from one or more credit cards to a new card, typically with a lower interest rate. A credit card company may offer 0% introductory rates, meaning you won’t pay any interest for the promotional period. But you could pay a transfer fee for credit card consolidation.

Did you know?

Using a credit card balance transfer can help save you money and simplify your debt payment process. Be sure to read the terms and conditions any balance transfer offer to learn more about fees and interest rates.

Learn More

Credit counseling

Credit counseling involves sitting down with a credit counselor to assess your financial situation and choose the debt relief option that’s right for you. Before working with a credit counselor, do your homework. Most trustworthy agencies are non-profit and employ certified financial counselors. Your credit card company may include recommendations for credit counseling agencies on your monthly statement.

To ensure the counselor you choose is trained and certified, consider a credit counseling service approved by the U.S. Department of Justice’s U.S. Trustee Program.

A credit counselor may work with you to create a debt management plan (DMP) to simplify your debt repayment. You might also hear this called a “debt management program”.

 

With this process, you make one monthly payment to the credit counseling agency instead of multiple payments to separate creditors. The agency then pays your creditors. You don’t have to juggle due dates or bills, making debt management easier.

As part of a DMP, your counselor may reach out to your creditors to negotiate a reduction or elimination of the interest charges on all your outstanding debt. They may also try to extend your debt repayment timeline. However, creditors don’t have to agree to this.

 

Keep in mind that while enrolled in a DMP, you may not be able to use your credit cards or apply for new credit. You may also have to close a credit card account, which may feel inconvenient, but will be beneficial in the long run, as it will help you get out of debt.

Bankruptcy

Bankruptcy is a legal proceeding that clears your debts. While bankruptcy is often a last resort, it can provide a fresh financial start.

Chapter 7 bankruptcy is one of the most common forms of bankruptcy. When you file for chapter 7 bankruptcy, a court appoints a trustee to oversee your case. The trustee will sell your assets and use the proceeds to repay your creditors.

Bankruptcy erases most debt and resets your finances, but there are significant consequences. Bankruptcy negatively impacts your credit and can stay on a credit report for up to 10 years, making it harder to open new credit accounts in the future.

Questions to answer when choosing a credit card debt relief program

Credit card debt relief programs can provide much-needed financial assistance. But it’s important to choose one that best meets your needs. When determining which program is right for you, consider the following questions:

  • Interest rate: Are you able to secure a lower interest rate through a debt relief program?
  • Monthly payments: Can you afford the monthly payments associated with the debt relief program?
  • Credit score: How will the debt relief program impact your credit score and for how long?
  • Terms: Are you comfortable with the terms associated with the debt relief program? (Consider, for example, the repayment period.)
  • Fees: What fees will you need to pay? Are they reasonable, and can you afford them?

The bottom line

Credit card debt relief options can help you reduce or pay off your credit card debt. Each debt relief program has its own risks and benefits.

 

If you can pay off your credit card debt, but you need a bit more time or want to reduce what you pay in interest, you may consider a debt consolidation loan or a balance transfer credit card offer. If you can’t pay back your debts, or doing so would be very difficult, bankruptcy may provide a new financial start.

 

Keep in mind that debt relief companies may charge you fees for their services. If you’re not sure how to approach debt relief, consider financial counseling. A certified financial counselor may be able to help you choose the right method for you.

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