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Debt is a reality that many Americans face and recent data paints a sobering picture. As of late 2024, consumer debt had reached an all-time high, with credit card balances accounting for $1.17 trillion. And, nearly half of all credit card users are carrying balances from month to month, incurring steep interest rates that compound the financial strain. Meanwhile, inflation has shown signs of resurgence, driving up costs for essentials like groceries and utilities. These trends create a perfect storm for households already teetering on the edge of financial instability.
Quite a lot of households are teetering on that edge, too. For example, about 9% of credit card payments are now delinquent, signaling big issues among cardholders — and the average credit card user is carrying a balance of about $8,000. About 20% of cardholders are also maxed out, meaning that they’ve used up all of the credit that’s available to them.
If you’re dealing with one or more of these issues, it makes sense to try and take charge of the problem as soon as possible — and this February is an ideal time to do that. Whether you’re grappling with high loan balances or are overwhelmed by revolving debt, there are a few reasons you may want to take advantage of what debt relief can offer.
Chat with a debt relief expert about your options now.
3 reasons to pursue debt relief this February
It makes sense to start the debt relief process this February, in particular, for the following reasons:
Today’s high rates aren’t going anywhere
The Federal Reserve is slated to hold its first meeting of the year on January 28 and 29 — and while there’s a slim chance that the Fed could cut rates once more, the reality is that it’s highly unlikely to do so. After all, inflation has been ticking back up, and as a result, analysts now largely agree that the Fed’s rate cut policy will be more conservative in 2025. The Fed has also signaled that it will be cautious about future rate cuts, so while the central bank could theoretically slash its benchmark rate at that meeting, it’s not likely to happen.
In turn, the rates on your credit cards, loans and other borrowing options are likely to remain high. That’s not great for your wallet, considering that the average credit card interest rate is now hovering near 23%, a historic high. By pursuing debt relief, though, you may be able to avoid paying months, or even years, of exorbitant interest charges, making it easier to get rid of what you owe.
Find out what debt relief strategies could benefit you today.
Your revolving debt is compounding quickly
Your revolving debt, such as credit card balances, operates differently from fixed-term loans. Unlike a car or mortgage loan with a set payoff schedule, revolving debt compounds daily based on your balance and interest rate. This means you’re essentially paying interest on your interest, making it much harder to reduce the principal amount over time. The longer you let revolving debt sit unchecked, the more it snowballs. This compounding effect can create a vicious cycle where even substantial payments barely make a dent in the overall balance.
But pursuing debt relief options like balance transfers, debt consolidation or debt forgiveness can curb this cycle. These strategies help streamline payments, often with lower rates or structured repayment terms, so more of your money goes toward reducing the principal balance.
The debt relief process takes time
The debt relief process can provide serious relief, but it isn’t instantaneous. While it varies by the debt relief option you utilize, these programs typically take anywhere from two to five years on average to complete. For example, debt consolidation, which involves combining multiple debts into a single loan, requires time to research lenders, complete applications and get approved. And, debt settlement programs typically require even more work and planning before the repayment process begins.
But if you start the process in February, you could be debt-free by early 2027. That may seem like a long time away, but it’s almost certainly preferable to watching your balance grow larger through more months or years of inaction.
The bottom line
This February, consider making debt relief a priority. With interest rates unlikely to drop soon and revolving debt compounding rapidly, the benefits of taking action far outweigh the costs. By addressing your debt head-on, you can pave the way for a more stable and secure future. So don’t wait for conditions to improve — take charge now and set yourself on the path toward financial freedom.
