How much can you save with credit card debt forgiveness this August?

CBS News

a day ago

Credit card debt has been hitting new highs in 2025, and Americans are feeling the pressure. Credit card balances rose by another $27 billion in the second quarter of this year, pushing the total to a staggering $1.21 trillion, according to the New York Fed's latest Household Debt and Credit Report, released this week. And, with the average credit card rate hovering near 22%, just below the latest record-high, those carrying balances are paying dearly for it.
After all, as the credit card interest charges compound at today's high rates, it gets harder and harder for the average person to pay off what they owe, especially as sticky inflation eats into their income. And, as more cardholders struggle to make minimum payments, dodge their due dates and become more overwhelmed, many are turning to credit card debt forgiveness as a way to eliminate debt faster — and for less than they owe.
But how much can you actually save with this strategy right now? And is this the right time to consider it? Before you decide, we'll detail what to know about credit card debt forgiveness this August and how much you could realistically save.
Find out how to start the credit card debt forgiveness process today.
Each person's outcome will differ with this debt relief strategy. That said, credit card debt forgiveness reduces balances, on average, by about 30% to 50%, before fees are calculated in. However, it's important to understand that not everyone qualifies for that kind of reduction. Here's how the process generally works:
So what determines how much you'll save?
Now let's look at some sample savings based on the typical settlement ranges:
If you owe $7,000:
If you owe $15,000:
If you owe $25,000:
However, your savings decrease if you factor in the debt relief company fees, which are typically 15% to 25% of the settled amount. So, that $12,000 savings on $20,000 of debt might actually net you $8,000 after fees and taxes. Even after fees, though, many cardholders still save enough to justify the extra costs, and, more importantly, they open the door to becoming debt-free faster.
Learn more about how debt forgiveness could benefit you (and your finances) now.
Debt forgiveness can be a smart path to pursue in certain cases, but it isn't a perfect fit for everyone. It's generally best suited for people with serious unsecured debt, who can't afford to pay it off in full and don't qualify for other forms of relief like a consolidation loan or 0% balance transfer card. Here are a few signs it might be worth considering:
On the flip side, debt forgiveness is probably not ideal if you're still current on your payments, have relatively low balances or can qualify for lower-interest alternatives like a personal loan. That's because this type of debt relief typically requires you to stop making payments, which damages your credit score. The forgiven debt may also be considered taxable income by the Internal Revenue Service (IRS).
When you're dealing with tens of thousands of dollars in high-interest debt, the right strategy can make all the difference. And, credit card debt forgiveness, in particular, could help you cut your balance significantly this August. Just make sure you understand the trade-offs, run the numbers and weigh other options like debt consolidation or credit counseling first. If debt forgiveness still seems like the right fit, working with a reputable debt relief company can help you negotiate better terms and avoid common pitfalls.