Credit card debt has been increasing nationwide, with the total amount owed now sitting at $1.14 trillion. For the average person, this translates to a credit card balance of about $8,000, an amount that many people struggle to pay off. Part of the issue is that the average credit card interest rate now surpasses 23% and the average retail card rate now sits above 30%, and as the interest charges compound, cardholders — including those who make consistent payments — may find that their balances barely shrink. 

If your credit card debt balloons and becomes unmanageable, you may find that you’re seriously considering bankruptcy as a solution to your high-rate debt. But while filing for bankruptcy can result in discharging or restructuring your debt, allowing you to start fresh, it also carries significant consequences that are important to factor in. 

Chief among these is the substantial impact bankruptcy has on your credit score, which can, in turn, damage many areas of your financial health. So, before you file for bankruptcy, it’s essential to weigh the benefits of clearing your overwhelming debt with this method against the potential damage to your creditworthiness.

Start comparing your debt relief options here.

How will filing for bankruptcy impact my credit score?

Filing for bankruptcy can significantly damage your credit score. When you file for bankruptcy, your credit score typically drops by 100 to 200 points or more, depending on where you started. This means someone with a credit score of 680 may see their score plummet to between 480 and 580 after filing. 

That said, the impact on your credit also varies. The more robust your credit score was initially, the bigger the impact bankruptcy will have as a result. However, if you were already missing your credit card payments or carrying high balances, your credit score may have already taken significant hits before filing and a bankruptcy may have less of an impact. 

The damage can also last a while. A Chapter 7 bankruptcy, which allows most unsecured debts to be discharged, typically stays on your report for 10 years, while a Chapter 13 bankruptcy, which involves a repayment plan, remains for seven years. During this time, the bankruptcy notation on your credit report can make it more challenging to qualify for new credit or loans. Lenders may consider you a high-risk borrower and offer higher interest rates or stricter terms if they do extend credit.

The good news is, though, that after bankruptcy, your score can recover with responsible financial behavior over time. Though the bankruptcy will remain visible on your report, many people begin to rebuild their credit through secured credit cards, low-limit cards or credit-builder loans. Adopting good habits — such as making on-time payments and keeping balances low — can also help you gradually regain a higher score, even while the bankruptcy is still on your record.

Learn how your debt relief options could help you avoid bankruptcy.

What other debt relief options do I have?

Before considering bankruptcy, it can make sense to explore these alternative debt relief options, which may have less severe impacts on your credit score:

Debt consolidation 

Consolidating high-interest credit card debt into a loan with a lower interest rate can reduce your monthly payments and simplify the debt management process. While consolidation may temporarily lower your credit score by 10 to 30 points due to the credit inquiry and new account, this impact is typically much less severe than bankruptcy and your credit generally recovers within a year if payments are made on time.

Debt management plans 

Working with a credit counseling agency to enter a debt management plan can help lower your interest rates and create a structured repayment plan. Debt management plans typically have minimal impact on your credit score, and some creditors may even re-age your accounts to current status after several successful payments.

Credit card hardship programs 

If you’re struggling due to a temporary financial setback, many credit card issuers offer hardship programs that can temporarily reduce interest rates or monthly payments. These programs may or may not affect your credit score, depending on how the issuer reports the arrangement to credit bureaus, so always ask about the credit reporting implications before enrolling.

Debt forgiveness 

Pursuing debt forgiveness can reduce your total balance by 30% to 50% in many cases, and while debt forgiveness can damage your credit score, the impact is usually less severe than bankruptcy. The associated accounts typically show as “settled” or “paid as agreed for less than the full amount” on your credit report and remain for seven years. However, your score may drop by 60-100 points when accounts first go delinquent during negotiations.

The bottom line

Ultimately, the decision between filing for bankruptcy or pursuing an alternative debt relief option is personal. Bankruptcy can offer a fresh start when you’re buried in high-rate credit card debt, but it’s essential to consider the long-term impact on your credit score and financial health. It can also help to weigh your other debt relief options, such as debt consolidation, debt forgiveness or debt management, as they could help you avoid bankruptcy, though they may not offer the same level of immediate relief. 

Vice President Kamala Harris is leaning into the economy and abortion rights in some of her last advertisements before Election Day, as her closing message comes into focus.

One of two new ads that are set to air this week in the seven battleground states includes a direct-to-camera appearance by Harris, where she says if elected, former President Donald Trump will “wake up every day and stew over his enemies list.”

“Next January, one of us will be President… If I am president, I will be focused on my to-do list for you, the American people,” Harris says in the ad, “Lists,” which was obtained first by CBS News. Harris then ticks through some of her economic proposals to cut everyday costs, such as enacting a federal ban on price gouging and incentives to make housing more affordable. 

The ads will air on broadcast and cable TV programming and are part of the $370 million ad buy that the Harris campaign announced in August, which began on Labor Day and will run through Election Day. 

The focus on the economy comes as Harris has been more competitive with Trump in terms of polling on the issue. An October CBS News poll showed Harris gained 5 points from August in terms of voters who believe her policies would make them financially better off. 

Trump still holds the edge in this category: 44% believe his economic plans will help them, and among voters who cite the economy as a major factor, 56% believe this, compared to 43% for Harris’ 43%.

The second Harris campaign ad, titled “Punishment,” is centered around a 2016 interview clip of Trump in which he called for “some form of punishment” for women who have abortions. Trump’s campaign clarified that if Congress made abortion illegal, that the doctor would be held responsible, not the woman. The ad also features several women who have appeared in Harris campaign ads or on the trail for her, who have personal stories regarding abortions or their inability to obtain an abortion after the Dobbs decision. 

The issue of abortion access and women’s reproductive rights has been a galvanizing force for the Democratic party and Harris’ campaign, especially among women and younger voters. In an October CBS News poll of the crucial battleground state of Pennsylvania, of those that ranked abortion as a “major factor” in their vote, 62% were women and 67% were under 30 years old. 

Trump has had shifting positions on abortion access, often saying that it should be left up to the states to decide. Last Saturday, he suggested that abortion “has dropped way down as an issue” and that voters are more focused on immigration and the economy. He said Wednesday during a rally in Green Bay, Wisconsin, that he would “protect the women of our country… whether the women like it or not.”

On Thursday, Harris called Trump’s comment “very offensive” and told reporters in Wisconsin it is the “latest in a series of reveals by the former president of how he thinks about women and their agency.”

“These ads focus on core issues that matter most to our voters, and cement the fundamental closing contrast in this election: between a candidate in Vice President Harris who will work everyday to fight for the American people and Donald Trump who is out for only himself,” said Harris-Walz principal deputy campaign manager Quentin Fulks.

The “Punishment” spot will air during broadcast shows and on cable networks that reach predominantly female audiences, such as “Grey’s Anatomy,” “The View,” Bravo, Hallmark, HGTV and TLC. “Lists” is targeted to shows with more politically diverse audiences with high viewership, such as “Shark Tank,” “Jeopardy” and “Wheel of Fortune.”