U.S. Credit Card Debt Hits $1.23 Trillion: Key Mistakes to Avoid When Seeking Debt Forgiveness
Experts warn Americans against common errors as interest rates soar and debt relief options tighten in 2026.
As credit card debt in the United States reaches a record high of $1.23 trillion, millions of Americans are facing serious financial strain—especially as the average interest rate has climbed above 21%, nearly double what it was five years ago.
For some borrowers, 2026 may offer an opportunity to explore credit card debt forgiveness, a process in which card issuers may accept a lump-sum payment lower than the total balance and forgive the remaining debt. However, experts warn that several common mistakes can significantly reduce the chances of success, according to CBS News.
Waiting Too Long
Some borrowers may be tempted to wait in hopes that interest rates will fall following recent Federal Reserve rate cuts. Experts say this is unlikely. Howard Dvorkin, chairman of Debt.com, notes that credit card issuers set interest rates using their own formulas, warning that waiting for rates to drop could end up costing borrowers more.
Failing to Provide Documentation
To qualify for debt forgiveness, borrowers must prove genuine financial hardship, such as job loss or unexpected medical expenses. Experts stress the importance of submitting verified documents—such as termination letters, divorce decrees, or medical bills—to ensure banks take the request seriously.
Continuing to Use the Card
One of the most common mistakes is continuing to make purchases while seeking debt relief. Adding new debt weakens the borrower’s position and reduces the lender’s willingness to negotiate. Dvorkin compared it to “trying to fill a bathtub while the drain is still open.”
Assuming Forgiveness Is Quick and Easy
Experts emphasize that credit card debt forgiveness is rare and complex, usually reserved for individuals experiencing severe financial distress. Kim Chambers, director of card products at Georgia’s Own Credit Union, explains that forgiveness is typically a last resort for lenders and applies only to accounts that are seriously delinquent—not those just slightly behind on payments.
When successful, borrowers may negotiate directly with banks or work through specialized debt management firms. The process can take several years—up to four years in some cases.
