5 Ways to Consolidate Credit Card Debt

Many people struggle with credit card debt at one point or another, and the higher your balances get, the harder it can be to pay them off, especially when you consider compounding interest.

Consolidation is a way to move high-interest debt onto a lower-interest product, like a balance transfer credit card or a consolidation loan, which then makes it easier to pay off. But this strategy isn’t for everyone, and you should weigh your consolidation options carefully.

The best choice will likely depend on how much debt you have, your credit score and other factors explained below.

What is credit card consolidation?

Credit card consolidation is when you use another credit product to pay off your credit card balances in one fell swoop. You’re then left with only one payment on your new debt.

For consolidation to make sense, the new debt should have a lower annual percentage rate than your credit cards, so you save money on interest. You can even apply that savings back to your debt, which will shorten the payoff period and get you out of debt faster.

Is consolidating credit card debt a good idea?

Consolidating credit card debt is a good idea if you can qualify for a low enough interest rate and pay off the debt during the allotted time period, which will vary based on the consolidation product you choose.

You’ll also want to be certain you can keep your credit card balances at or near zero while you pay off the new debt. For example, if you take out a consolidation loan to pay off your credit cards, but then accumulate a balance on your credit cards again, you’ll be in a worse position than when you started.

Best ways to consolidate credit card debt

If consolidation sounds like the right move for you, here are five effective and safe ways to pay off your credit card debt: