Do you have to close all your credit cards when settling debt?

Between today’s high inflation rate, the elevated interest rates meant to temper it and other economic hurdles, there’s no question that many households are facing issues with their finances. After all, elevated inflation can lead to vastly increased costs on everything from the fuel for your car to the roof over your head, and if your finances were already stretched thin before the uptick in the cost of living, chances are you’re feeling the impact of much tighter budgetary constraints now.

In these situations, you may even be relying on short-term borrowing tools, like credit cards, to help cover some of your essentials. But while doing so can be a route to covering the costs of your necessities, it also typically comes at a high price, as credit card interest rates are hovering near 22% on average currently. So, if you’re using your credit cards as a stop-gap measure but are unable to pay the balance off each month, the interest charges can, and often do, compound quickly.

And that, in turn, can lead to overwhelming credit card debt. When looking for solutions to this type of debt, some people will consider credit card debt settlement as a way to settle the balance and pay less than the full amount owed. However, when considering debt settlement, a common question arises: Do you have to close all your credit cards during this process? Below, we’ll detail what you should know.

 

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