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If you are struggling with credit card debt, you are not alone. More Americans are falling behind on their credit card payments. According to a recent New York Fed report, the rate of new credit card delinquencies has surpassed its pre-Covid level, clocking in at 7.2% in the second quarter of 2023. And with student loan payments set to resume for most borrowers this October, delinquency rates could increase.

If you are behind with your credit card payments, these steps can help you navigate your debt situation.

1. Start with your credit card company.

Regardless of the reason for your delinquency (job loss, inflation or illness), contacting your credit card company early on improves your chances of avoiding a debt in collection, damage to your credit report, and a potential lawsuit or bankruptcy.

This Consumer Financial Protection Bureau (CFPB) resource walks you through it:

2. Be Informed: Avoid working with debt settlement companies.

Debt settlement companies or debt relief companies could leave you in a worse financial position than where you started. Debt settlement companies encourage you to stop paying credit card bills and instead require regular payments into a third-party account they manage until the account balance reaches an amount deemed sufficient for it to try to “negotiate” with the credit card company. Meanwhile, because you have stopped paying your credit card accounts, you continue to incur interest, late fees and other charges, which increases the balance due. In addition, the failure to make monthly payments has a negative impact on your credit score and increases the risk of a creditor filing a debt collection lawsuit against you. Since the debt settlement companies will only negotiate with a credit card company after a certain sum is built up in the third-party account, the additional penalties and fees on the unsettled debt could wipe out any savings the debt settlement company achieves on the debt. This will be in addition to the high fees charged by the debt settlement companies.

Read about one consumer’s experience with a debt settlement company:

insideARM: A Peek at the Disturbing Fine Print of a Debt Settlement Contract

This CFPB resource explains what a debt relief program is:

You DO NOT receive a better deal when working with a debt settlement company.

Credit card companies do not have a special relationship or affiliation with debt settlement companies. In fact, some credit card companies could refuse to work with debt settlement companies. Despite the promises made by debt settlement companies, you will not receive a better deal by working with them instead of working directly with your credit card company. In fact, you could receive a worse deal. This chart, created by the CFPB, breaks down a cost comparison between working with a debt settlement company and working directly with your credit card company.


Working with debt settlement company

Working with your credit card company

Debt Owed



Debt Forgiven







$2,000 (debt settlement fee)


Total Paid



Money Saved



Source: Consumer Financial Protection Bureau

This CFPB resource describes the differences:

What’s the difference between a credit counselor and a debt settlement or debt relief company?

3. Seek help from credit counseling services.

Your credit card company can provide you with many options to resolve your delinquency, including referring you to a non-profit credit counselor. Most importantly, these non-profit credit counselors are usually free of charge. Credit counseling organizations can assist you with creating a debt management plan for all your debts by making a single payment to the credit counseling organization each month or pay period.

For more information, check out ABA Foundation’s step by step guide on getting out of debt.