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If you’re struggling to manage your credit card debt, it’s important to know that you’re not alone. The average borrower has $5,472 in credit card debt, according to TransUnion’s Q1 Industry Insights Report for 2018. Worse, that number doesn’t take into account other forms of debt, such as medical bills, auto loans, or personal loans.

Thankfully, there are strategies you can use to tackle your debt. One of the most common is credit card refinancing. Find out whether or not it’s a good fit for you.

What is credit card refinancing?

Credit card refinancing can be a good option if you’re struggling with high interest rates and credit card debt. Typically, refinancing your credit card debt is when you take the amount you owe on one card and transfer it to another card or a new loan with a lower interest rate.

Here are the different ways you can refinance your credit card debt:

  1. Try a 0% APR balance transfer credit card: You could transfer your credit card balances to a new credit card with a promotional APR. You can combine the balances on several current credit cards into one with a low rate. That way, you’ll be able to have just one card with a balance, one minimum monthly payment, and one due date to remember.
  2. Take out a personal loan: If you need a longer time to pay off your debt, you could instead take out a personal loan for the amount you owe. Typically, personal loan rates will be lower than your credit card APR. So you can pay off your credit card debt, then pay it off over the new loan term instead, saving you tons of money in interest payments. And so you don’t have to fret over filling out tons of applications, Credible makes it easy to compare rates from personal loan lenders in just minutes. Then, you can see the loan offers and choose the best one for your situation.
  3. Tap into a home equity loan: Another of the loan options is to tap into your home’s equity. If you have job security and/or a steady income, this could be a good way to consolidate credit card debt. Just keep in mind that using your home’s equity to pay off debt can be risky because you’re putting your home on the line as collateral.

There are more ways to consolidate credit card debt, but these are your best options as many credit card companies offer balance transfer deals or you can find a loan from a financial institution.

Pros and cons of the different types of credit card refinancing

If you’re trying to decide which option makes the most sense for you, carefully weigh the pros and cons of each using the table below to help you make your decision.

 ProsCons
0% Balance Transfer Cards• No interest if paid off before 0% APR promotional offer is up
• One single payment
• Balance transfer fees
• If you don’t pay it off within the short time, you could end up with a higher interest rate than you started with
Personal Loans• Typically lower interest rates than credit cards
• One single payment
• Fixed interest rates
• Must make full payment every month (not just minimum)
• Typically come with an origination fee, around 3% on average
Home Equity Loans• Typically lower rates than credit cards or personal loans
• One single payment
• Fixed interest rates
• Have to put up home as collateral

What to know before you consider refinancing

Credit card refinancing can help you pay off your debt ahead of schedule and save a significant amount of money. However, you can’t depend on this strategy alone to fix the problem.

Without identifying and resolving the root cause behind the debt, you’re simply moving your debt into another form. If you’re not careful, that can just make the problem worse.

Before moving forward with either a debt consolidation loan or a balance transfer credit card, make sure you understand how exactly you ended up in debt and have a payment plan ready to address the problem. That might mean creating and sticking to a budget, starting a side hustle to earn more money, or making more drastic financial changes like getting a roommate or downsizing where you live.

When combined with these behavior changes, credit card refinancing can be a useful tool to help you get out of debt more quickly.