3 credit card debt mistakes borrowers should avoid this November

CBS NEWS

By Matt Richardson

Household debt hit a new record high in the third quarter of 2025, according to a report released earlier this month. The cumulative household debt in the country grew to $18.59 trillion, increasing by $197 billion from the previous quarter. And while that was largely driven by mortgage debt, credit card debt also contributed to this troubling statistic.

Specifically, credit card balances grew to $1.23 trillion in the third quarter of the year. That’s nearly 6% higher than it was one year ago, marking a $24 billion increase in the third quarter alone. Combined with credit card interest rates sitting at 21%, just under a record high, it’s easy to see why credit card debt is a major and growing problem for millions of American borrowers right now.

The key, then, is to both find a workable debt relief solution and, just as importantly, stop contributing to the debt spiral any further. To successfully accomplish both goals, however, it helps to know which important (and costly) credit card debt mistakes to avoid making this November. Below, we’ll detail three that borrowers should know right now.

Start by exploring your top credit card debt relief options here.

3 credit card debt mistakes borrowers should avoid this November
By avoiding these three costly credit card debt mistakes this month, borrowers can put an end to their growing debt balances and, more importantly, begin the delayed work of regaining their financial independence:

Mistake: Assuming Fed rate cuts will reduce their credit card rates
The Federal Reserve issued an interest rate cut in September. And another in October. A third cut now looks likely for the central bank’s December meeting, too. These will all cumulatively help cool the interest rate climate but they’re likely to have a muted impact on credit card interest rates.

Credit cards rates are based on the prime rate, not the federal funds rate. While closely aligned, they’re not the same. Additionally, Fed rate cuts this year have both come in just 25 basis point increments with the December cut expected to be by the same minor margin. Even if all of those cuts were applied to credit card rates identically, it wouldn’t even lower the average rate by a full percentage point. So don’t wait around for Fed rate cuts to reduce your already problematic credit card rates. Consider taking proactive, practical steps now instead.

Learn which credit card debt relief option can help you now.

Mistake: Not accounting for compounding interest this holiday season
Spending this holiday season is expected to surge, with consumers forecast to spend more than $700 on gifts, a 10% increase from 2024. Many of these purchases will be made by swiping plastic versus paying cash. And while that’s already an issue thanks to high credit card rates and balances, it’s even more serious for borrowers already saddled with big balances.

Credit card interest compounds daily until it’s paid off entirely. So not only will these credit card users be adding to the principal balance, but the compounding interest tied to their previous purchases will continue to surge in the background. Do all you can, then, to reduce your expenses this season and, when you can’t, instead consider turning to cash or debit cards. You don’t want to start 2026 in a worse financial position than you were in the final weeks of 2025.

Mistake: Assuming credit card debt relief strategies won’t be applicable

There can be a tendency on behalf of credit card users stuck with growing balances to believe that their debt relief options are limited and that they’ll have to dig out on their own. And it can be even easier to fall into this mindset during this time of year as holiday expenses quickly pile up. But this is a misconception that could become a costly mistake if borrowers don’t take the time to research their available credit card debt relief strategies.

Credit card debt forgiveness, for example, can help reduce credit card balances by 30% to 50%, as long as borrowers meet some simple criteria. Debt management programs can also be applicable, helping you build a plan that works for your budget with minimal credit score damage. Credit counseling can also be helpful as could products like balance transfer credit cards and debt consolidation loans for those users who still have good credit scores. Just don’t assume that most credit card debt relief strategies won’t be applicable. With the right approach and appropriate plan, you can start the delayed work of reducing what you owe this month.

The bottom line
Americans burdened with expensive credit card debt now need to determine what to do next – and what moves to avoid that can make their situation worse. By circumventing the above three mistakes, borrowers will avoid having their debt situation deteriorate further. But proactive action will still be required in order for them to regain their financial freedom entirely. Consider speaking with a debt relief expert or financial advisor, then, who can help answer your specific questions and help you build a tailored strategy that can eliminate your credit card debt woes once and for all.

Edited by Angelica Leicht

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