How to prepare for credit card debt forgiveness this May

With the average credit card debt worth thousands of dollars now, the average credit card interest rate over 20% currently and compound interest charges making it more difficult to pay off what you owe, many Americans are understandably looking to explore their debt relief options now. And with factors like stock market volatility, inflation, interest rate policy and more all making it difficult to predict what will happen this May and in the months to follow, many would benefit from taking proactive steps now. For some, this could extend to credit card debt forgiveness programs.

With a credit card debt forgiveness program, borrowers could see their outstanding debt balance reduced by 30% to 50%, depending on their circumstances. That could be major relief for many cardholders and be precisely what they need to regain their financial freedom. But this won't happen overnight and not everyone with credit card debt will automatically qualify. To better position yourself for this assistance, then, it helps to know how to specifically prepare for credit card debt forgiveness this May. Below, we'll detail three steps worth considering now.

Start by checking your credit card debt relief options online here.

How to prepare for credit card debt forgiveness this May

Here are three ways credit card users may want to prepare for credit card debt forgiveness this May:

Understand the economic reality

It can be tempting, in today's unique economic climate, to wait for changes that can impact your debt. But that would be a long wait. Even if the economy improves so significantly as to encourage the Federal Reserve to resume it's interest rate cutting campaign, it's likely to have little impact on your credit card debt (and rates). That's because credit card rates are tied to the prime rate, not the federal funds rate that the central bank adjusts. And even then, a decline in rates when they're comfortably over 20% won't significantly impact what you owe, or the interest that's already compounding. So, in many circumstances, waiting for the economy to change to boost your financial situation isn't just the wrong approach, it could be a dangerous one if you continue to use your card, rack up debt and let it compound in the interim.

Get started with credit card debt forgiveness instead now.

Check your eligibility requirements

There are some relatively stringent eligibility requirements that cardholders must meet to secure credit card debt forgiveness. This means having debt, at a minimum, of $5,000 to $10,000. But it also means being behind on payments and the ability to demonstrate financial hardship (or hardships) that have made making your payments impossible at this time. If you don't meet all three criteria, you'll likely not qualify for forgiveness and will instead be redirected to alternatives like balance transfer credit cards, debt consolidation loans and possibly debt management programs or even credit counseling. So make sure you understand the eligibility requirements now, this April, before officially applying for help this May.

Speak to a professional

While the eligibility requirements for credit card debt forgiveness are relatively straightforward, they could be more stringent or flexible depending on the specific servicer being used. And, in today's rapidly changing economic climate, your financial health could be changing on a weekly basis. With this understanding, then, it makes sense to speak to a professional to determine your smartest path forward. Consider, then, speaking to a financial advisor who can help you. But also look to speak to professionals representing select debt relief companies who can answer your questions and work with you to build the most appropriate debt relief solution for your needs. While you may have independently dug yourself into a debt hole, depending on the severity, you may need a lot of help to dig out of it. A professional can help you get started.

The bottom line

Credit card debt forgiveness is not an overnight solution. Preparing for it will take time, effort and follow-up, so if you're committed to this specific debt relief path it makes sense to get started now. But remember that credit card debt forgiveness often takes years to reduce what you owe and there will likely be credit score ramifications. Preparing in advance, then, is key to making this debt relief type work well for your needs and long-term credit health.