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If you’re juggling multiple credit card balances, you may want to consider consolidating your debt. Fortunately, you have several options to choose from, including a personal loan, balance transfer credit card, and a few others.
Consolidating your credit card debt can streamline the repayment process and help you become debt-free sooner. Here’s how to do it:
- What is credit card debt consolidation?
- How to consolidate credit card debt
- Should I consolidate my credit card debt?
What is credit card debt consolidation?
In simple terms, credit card debt consolidation is taking out a new credit product (typically a loan or another credit card) to pay off your existing card balances. Having multiple credit cards with different due dates makes it easy to miss payments. Then late fees are charged, your credit score is dinged, and your interest rate may go up as a result.
With credit card debt consolidation, you’re replacing multiple monthly payments of varying amounts, due dates, and interest rates with one monthly payment to the company you took the consolidation loan out with.
Ideally the new loan you take out will have a fixed, low interest rate with set monthly payments that are easy to keep track of and budget for.
In addition to potentially saving money on interest, credit card debt consolidation can simplify your financial life, giving you one number to keep track of in your journey toward becoming debt-free.
How to consolidate credit card debt
You can consolidate credit card debt in many different ways. The best option for you will depend on your financial situation, goals, and credit score.
Personal loan
Best for people who want fixed monthly payments and a clear end date for paying off their debt
Personal loans, or debt consolidation loans, are one of the most common ways to consolidate credit card debt. These loans are unsecured, so they’ll have higher interest rates than a loan secured with collateral. But they tend to have lower interest rates than credit cards, which can help you save money over the life of the loan. And their interest rates are fixed, which means your monthly payment amount will stay the same.
With a debt consolidation loan you’ll receive a lump sum of money up front that you can use to pay off your credit card balances. Some lenders will pay your creditors for you directly, so you can avoid the hassle of dealing with it yourself. You’ll then repay the loan over a set period of time that you agree on.
The personal loan companies in the table below compete for your business through Credible. You can request rates from all of these partner lenders by filling out just one form (instead of one form for each) and without affecting your credit score.
| Lender | Fixed rates | Loan amounts |
|---|---|---|
Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 7.99% - 35.99% APR | $7,500 to $50,000 |
|
||
Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 9.95% - 35.99% APR | $2,000 to $35,000** |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 7.99% - 15.19% APR | $10,000 to $50,000 |
|
||
Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 8.99% - 35.99% APR | $2,000 to $50,000 |
|
||
Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 6.99% - 24.99% APR | $2,500 to $35,000 |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 10.5% - 29.99% APR | $5,000 to $40,000 |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 8.3% - 35.89% APR | $1,000 to $40,000 |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 7.99% - 35.99% APR | $2,000 to $36,500 |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 5.99% - 23.99% APR | $5,000 to $100,000 |
|
||
Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 18.0% - 35.99% APR | $1,500 to $20,000 |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 7.74% - 17.99% APR | $600 to $50,000 (depending on loan term) |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 5.99% - 35.99% APR | $3,500 to $40,000 |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 8.99% - 23.43% APR10 | $5,000 to $100,000 |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 11.69% - 35.93% APR7 | $1,000 to $20,000 |
|
||
Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 8.49% - 35.97% APR | $1,000 to $50,000 |
|
||
Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 5.4% - 35.99% APR4 | $1,000 to $50,0005 |
|
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Balance transfer credit card
Best for people with good credit who have a plan and can pay off their debt fast
A balance transfer credit card when paired with an introductory 0% APR offer can be a powerful way to pay off debt quickly and can save you a ton in interest. But keep in mind that you’ll most likely pay a balance transfer fee of 3% to 5% of each amount you transfer.
While the 0% APR periods vary by credit card issuer, they often range from 12 to 21 months from opening depending on the credit card offer. Make sure you have a plan in place and the diligence to see it through so that you pay off the balance by the time the 0% APR period is up. If you’re still carrying a balance when the intro offer ends, you’ll start accruing interest at the card’s regular rate, which can be high.
Debt management plan
Best for people with poor credit or who want to steadily pay off their credit card debt for good
A debt management plan is a way to consolidate credit card debt that doesn’t require a good credit score or proof of income. With a debt management plan, you’d start by choosing an accredited credit counseling agency.
Once you pick an agency, you’ll work with a counselor who will go through your income and expenses to determine how much you can afford each month to pay off your outstanding debt. The counselor will then negotiate with your creditors on your behalf to reduce fees and interest rates.
As part of your debt management plan, you’ll agree to make a monthly payment to the credit counseling agent directly, who will then make payments to your creditors. Most debt management plans through accredited counselors also include personal finance advice, which can help you avoid getting stuck with unmanageable credit card debt in the future.
However, keep in mind that some debt management companies may charge you a fee or monthly payment to use their services.
Cash-out refinance
Best for homeowners who want to tap their home equity for cash to pay off credit cards
If you own a home that’s worth more than what you owe on it, you have equity.
With a cash-out refinance, you take out a new mortgage for more than what you owe. You pay off your old mortgage and pocket the difference as cash that you can use to pay off your credit cards (or any other purpose).
But a cash-out refi may not be the best option. Interest rates have risen dramatically in the last year, so your existing mortgage likely has a much lower interest rate than you could get with a refinance. This option will likely only net you savings overall if you have a large credit card debt balance.
Home equity line of credit (HELOC)
Best for homeowners who want flexibility with borrowing amounts and payments
A home equity line of credit (HELOC) is a line of credit secured by the equity you have in your home. Since your home serves as collateral, you could get a lower interest rate than a personal loan.
HELOCs usually have variable interest rates, meaning that your payments can fluctuate based on market conditions. This makes them a bad option for people with large balances that will take years to pay off, but a good option for people with smaller balances they’ll be able to pay off quickly.
Home equity loan
Best for homeowners with higher credit card balances
A home equity loan is a type of second mortgage. You’ll receive a one-time payment based on the amount of your home’s equity. Like with a personal loan, you’ll repay a home equity loan with fixed monthly payments over a set period of time, usually five to 30 years.
Home equity loans sometimes have fees, but many lenders offer fee-free options. Since you can typically get lower interest rates than you would with a personal loan, HELOCs can be a good option for people with a large balance that they need to pay off over several years.
Should I consolidate my credit card debt?
Whether you should consolidate your credit card debt depends on your unique financial situation. If you have too much credit card debt to pay off within a few months, then consolidating it into one monthly payment at a lower interest rate will save you money long term.
When consolidating credit card debt, be sure to track your spending and stick to a budget so you don’t use the extra cash from the lower interest rates to rack up new debts. Use the breathing room that consolidation gives you to start fresh and get ahead of bills.
If you think a debt consolidation loan is the best option for you, Credible makes it easy to compare rates from our partners lenders to find a loan that suits your needs.
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