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

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.

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

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:

• You stop making payments to your credit card issuers and instead start saving funds in a separate account.
• After enough has been saved in the account, you (or the debt relief company you work with) start making lump-sum settlement offers to your creditors.
• If accepted, you pay the agreed-upon amount, and the debt is considered settled and the remainder of the balance is forgiven.

So what determines how much you’ll save?

• The age of the debt: Creditors may be more willing to negotiate if the account is already delinquent.
• Your financial hardship: A stronger case for hardship (job loss, medical issues, etc.) can boost your odds of a successful settlement.
• Your negotiation approach: A debt relief expert may be able to negotiate better terms than you can on your own due to their experience and established creditor relationships.
• Your total debt amount: Creditors might be more flexible if you owe a large amount or have multiple accounts in default.

Now let’s look at some sample savings based on the typical settlement ranges:

If you owe $7,000:

• At a 30% settlement, you could pay around $4,900, saving $2,100
• At a 50% settlement, you could pay around $3,500, saving $3,500

If you owe $15,000:

• At a 30% settlement, you could pay around $10,500, saving $4,500
• At a 50% settlement, you could pay around $7,500, saving $7,500

If you owe $25,000:

• At a 30% settlement, you could pay around $17,500, saving $7,500
• At a 50% settlement, you could pay around $12,500, saving $12,500

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.

How to decide if credit card debt forgiveness is right for you

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).

The bottom line

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.