Inflation, interest rates and credit card debt forgiveness: Here's what borrowers should consider now

There are ways to get out of credit card debt worth exploring now, even in today's unpredictable economy. Andriy Onufriyenko/Getty Images

News on Thursday that the inflation rate rose in August may not have been surprising, but it was still largely unwelcome for millions of American borrowers.

A higher inflation rate in recent years caused interest rates to surge, rising on everything from mortgage loans to credit cards. And though some rate cuts offered relief last year, the federal funds rate has remained on pause throughout 2025, maintaining an expensive status quo. Now, however, with inflation almost a full percentage point higher than the Federal Reserve's target 2% goal and questions over the potency over a presumed rate cut to come when the central bank meets next week, many borrowers find themselves thinking through their next steps.

This is especially true for those saddled with credit card debt. With the average credit card rate just under a recent record high and a cumulative debt balance in the country of over $1 trillion, it may be harder than ever to dig out of this debt. So it's understandable if these borrowers are looking for debt relief options, with credit card debt forgiveness being one of the more attractive solutions. But is that the right move to make in today's climate? Below, we'll examine a few items borrowers should consider now to better inform their approach.

Start by checking your credit card debt forgiveness qualifications online here.

What credit card borrowers should consider in today's economy

Not sure of what to do – and not do – with your credit card debt currently? Here are three things to consider now:

Rate cuts won't offer the relief you need

The Federal Reserve's monetary policy is just one factor that drives credit card rates. And credit card rates don't directly follow the central bank. Additionally, even if it does issue a rate cut on September 17, it's widely expected to be by just a quarter of a percentage point, which will offer little to no tangible relief for credit card borrowers with rates over 20% right now. Waiting, then, for the rate climate to cool so significantly that it's felt via your credit card interest rates is not only an unrealistic approach, but it will ultimately be an expensive one, too.

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Inflation makes the future of rate cuts hard to predict

A declining inflation rate increases the likelihood of a rate cut, but after it rose in the most recent report, the future of rate cuts has now become more difficult to predict. So, if you thought rate reductions cumulatively would help your debt situation – even if they don't necessarily provide that function now, as noted above – then it may be time to reconsider your long-term plans for reducing your debt. Additionally, there are only two Fed meetings left in 2025, after this month, so reductions will be delayed anyway – if they're to come at all after September.

Credit card debt forgiveness is just one of multiple options worth exploring

Credit card debt forgiveness, also known as debt settlement, can lead to your balance being reduced by 30% to 50% over a multi-year period. For many borrowers, this is their best recourse. But it's just one of multiple options worth exploring. With the top debt relief companies offering everything from credit counseling to debt management programs to debt consolidation loans, there's likely one or more solutions to your high-rate debt dilemma now. Don't rush into any one of them, however, without carefully weighing the pros and cons of each. Ultimately, credit card debt forgiveness may be your most applicable recourse, but you won't know that without careful consideration.

Compare some of your top debt relief solutions here to learn more.

The bottom line

Today's unique and unpredictable economic climate can understandably cloud the judgment of borrowers stuck with high-rate credit card debt. Failing to take action, however, is arguably worse (and more costly) than simply waiting for a cooling rate climate that may ultimately never materialize. Fortunately, there are multiple debt relief options worth researching, with credit card debt forgiveness being one of the more prominent ones. The key, however, is to take the first step. By exploring your options and then choosing one that best fits your needs, you can begin the journey of erasing your debt and regaining your financial independence.