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After in the last quarter of 2024, credit card balances are finally showing signs of improvement across the nation. in the first quarter of 2025, according to the latest Household Debt and Credit Report from the Federal Reserve Bank of New York, released this week, down $29 billion (2.4%) from the previous quarter. This marks a welcome reprieve for cardholders who have been grappling with record-high credit card debt .

Despite this quarterly improvement, though, credit card debt remains 6% higher compared to the same period last year. That uptick in the total credit card debt year-over-year reflects, at least in part, the ongoing struggle that many cardholders are facing with carrying debt in today's high-rate environment. With (APRs) exceeding 21% on average, the compounding nature of credit card interest can cause significant headwinds that make escaping the debt cycle increasingly difficult. 

As a result, it's crucial for those who are carrying credit card balances to find ways to reduce their debt. Luckily, if you're among those looking to , there are several methods to consider.

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The strategies outlined below could help you reduce your high-rate credit card balances, making it easier and more affordable to pay off what's owed:

Debt settlement (also known as ) may sound extreme, but this strategy can offer big relief to borrowers who are seriously behind on payments. With this approach, the goal is to work with your creditors, typically with the help of a debt relief company, to that's less than what you owe for the balance. If negotiations are successful, the settlement is paid and then . 

The tradeoff is, however, that you typically have to stop making payments while negotiations occur (and while you're saving up for a lump-sum settlement), which can in the short term. Forgiven balances over $600 are also often to the Internal Revenue Service (IRS), so be prepared for a possible tax bill. Still, if your credit card debt is unmanageable and you're or the threat of legal action, debt settlement may be a better path than defaulting or filing for bankruptcy. 

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If you're juggling multiple high-rate credit card balances, can be a smart strategy to lower your overall interest burden and make repayment more manageable. When you consolidate your debt, the goal is to roll multiple debts into one loan, lowering the interest and streamlining the payments. There are a few ways to do this, including:

are a powerful tool for debt reduction, offering introductory 0% APR periods that typically last up to 21 months. This interest-free window creates a valuable opportunity to make progress on paying down the balance without accruing additional interest.

However, be mindful of , which typically range from 3% to 5% of the transferred amount. If you take this route, it's important to calculate whether the interest savings outweigh the fees and develop a clear repayment plan to eliminate the debt before the promotional period expires.

Working with a credit counselor on can help you pay off your credit cards within three to five years on average. When you enroll in this type of program, the credit counselor will work directly with creditors to try and and simplify your repayments.

These plans can be a great fit if you're still current on payments but are overwhelmed by interest and struggling to make progress. However, they do come with limitations: You can't open new lines of credit while enrolled, and you may be required to close existing credit cards, which could affect your credit utilization and score, initially. Still, for many, the trade-off is worth the potential downsides.

Falling national credit card balances are a good sign overall, but millions of households are still struggling under the weight of their high-rate debt. If you're dealing with a similar issue, it's important to weigh your options and determine whether it makes the most sense to negotiate a settlement, consolidate your balances or follow a debt management plan. Ultimately, though, the right approach is the one you can stick with, so be sure to choose the strategy that offers the most relief while aligning with your unique circumstances.