$10,000 in Credit Card Debt? Don’t Rush to Forgiveness: Weigh the Consequences

Credit card debt forgiveness can reduce what you owe, but it might damage your credit score and lead to tax bills.

A Path to Relief, But Be Aware of the Consequences

Credit card debt forgiveness is a way to pay less than what you owe on your credit cards. You can do this by talking to your credit card company or a debt relief company. But, this might hurt your credit score and you might have to pay taxes on the debt that’s forgiven.

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(photo: CardRates.com)

Make Informed Decisions About Debt Forgiveness

Before you decide to forgive your debt, ask yourself five important questions. First, what is debt forgiveness? Second, how will it affect your credit score? Third, are there tax implications? Fourth, can you afford the program? And fifth, are there better options for you?

If you’re struggling with debt, you have other choices and you could combine your debts into one loan with a lower interest rate. You could also talk to a credit counselor who can help you make a plan to pay off your debts. In some cases, bankruptcy might be an option too. It’s important to think carefully before making a decision and weigh your options, according to the report of CBS News.

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