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What Is Credit Card Consolidation?

Credit card consolidation allows you to roll several credit card debts into one monthly payment.

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By Jerry Brown

Written by

Jerry Brown

Writer

Jerry Brown is a personal finance writer, owner of the Peerless Money Mentor blog, and a contributor to Credible. He has written for major publications such as Forbes Advisor, Business Insider, and Rocket Mortgage.

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Edited by Jared Hughes

Written by

Jared Hughes

Editor

Jared Hughes is a personal loan editor for Credible and Fox Money, and has been producing digital content for more than six years.

Updated January 16, 2024

Editorial disclosure: Our goal is to give you the tools and confidence you need to improve your finances.

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Credit card consolidation allows you to combine all of your credit card debts into one monthly payment. The main advantage of consolidating credit card debt is that it can save you money, especially if you qualify for a much lower annual percentage rate (APR).

However, before you consolidate your credit card debt, it’s a good idea to learn how it works, ways to combine your balances, and the pros and cons.

For example: Let’s say you have $18,000 of credit card debt spread across multiple cards. If you qualified for a 48-month personal loan at 10.00% and used the funds to consolidate your credit card debt, your estimated monthly payment would be $457, and the total interest paid over the life of the loan would be $3,913. As a result, you would pay less in total interest versus not consolidating and continuing to pay your credit card balance over the same four-year period.

How does credit card consolidation work?

Consolidating your credit card debt means taking out a new loan to pay off your current credit card debts.

Keeping track of repayment dates on your credit cards can be challenging. However, If you take out a personal loan to consolidate, you’ll only have one monthly payment. In addition, you may save hundreds or thousands of dollars if you qualify for a lower APR.

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