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Credit card balances have been on the rise for the better part of a decade. Despite a brief dip early in the pandemic, balances grew at their fastest rate in over 20 years in the second quarter of 2022, according to the Household Debt and Credit Report from the Federal Reserve Bank of New York.
If you’re burdened by credit card debt — or are just tired of paying high interest rates — consolidation is one way to get it under control. Consolidating your credit card balances can simplify your finances and help you pay off your debt faster.
Learn about the pros and cons of consolidating credit card debt:
- Pros of consolidating credit card debt
- Cons of consolidating credit card debt
- Ways to consolidate credit card debt
- Should I consolidate my credit card debt?
Pros of consolidating credit card debt
Paying high rates across two or more credit cards can make it difficult to manage your debt. Here’s how consolidating your cards can help:
Simplify your finances
If you’re like the average American, you carry several different credit cards. Having to track which card you used for which purchase — and which statements you’ve received and paid each month — is time consuming and can lead to errors. Consolidating your credit card balances leaves you with just one statement to review each month and one bill to pay.
Clarify what you’re paying
Credit cards typically charge an adjustable interest rate that can change from month to month. Even though your creditors disclose the annual percentage rates (APRs) for each card, market fluctuations can make it difficult to know exactly how much your debt is costing you from month to month.
Learn More: APR vs. Interest Rate: What’s the Difference Between Them?
Chances are, you can use a debt consolidation personal loan with a fixed rate to pay off your adjustable-rate credit card balances. That way, your interest rate never changes and you always know exactly how much you’ll owe.
If you’re considering a debt consolidation loan, Credible makes it easy to compare rates from multiple lenders, all in one place.
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Reduce your interest rate
Credit cards charge notoriously high interest rates — 16.65% on average as of May 2022, according to Federal Reserve data. The average interest rate for a 24-month personal loan during that same time frame was 8.73%. You might be able to get a lower rate by consolidating your balances, and the savings can be substantial.
For example: Say you have $8,000 in credit card debt at a rate of 16.65%. It would take 29 years and cost you $30,352 in interest to pay off the debt if you made minimum payments of roughly $112 per month.
If you consolidated that $8,000 balance into a personal loan with a 9% interest rate and a five-year repayment term, your monthly payment would go up to $166, but you’d pay just $1,964 in total interest.
Lower your monthly payment
A lower interest rate means lower monthly payments. You can use the savings to build some breathing room into your budget. Or, if your budget allows, put the extra money toward paying your debt down even faster.
Use our personal loan calculator below to estimate your monthly payments. Simply enter the loan amount, interest rate, and loan term to see how much you’ll pay over the life of the loan.
Enter your loan information to calculate how much you could pay
Loan amount ? Enter the total amount borrowed $ Interest rate ? Enter your annual interest rate % or Loan term ? Enter the amount of time you have to repay your loan years Total Payment $ Total Interest $ Monthly Payment $
With a $ loan, you will pay $ monthly and a total of $ in interest over the life of your loan. You will pay a total of $ over the life of the loan.
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Improve your credit score
Your credit utilization, which is the amount of credit you’re using compared to your total available credit, affects your credit score. If your credit utilization is too high, it can signal to creditors that you might be overextended.
Credit card debt consolidation can improve your score in two ways. First, it reduces your overall credit utilization, whether you take out a new credit card or a personal loan to pay off your current balances. Reducing or eliminating your credit card balances can help improve your score.
Check Out: How to Improve Your Credit Score in Just 5 Steps
Might allow cosigner
Getting a lower interest rate generally requires good credit. If your credit card debt has left you with a score that’s too low to qualify for new credit on your own, applying with a cosigner who has good credit could help you get approved or score a lower interest rate.
Some consolidation methods, such as a personal loan, might allow you to apply with a cosigner. You can use Credible to compare personal loans from lenders who allow cosigners.
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.   View details | 9.95% – 35.99% APR | $2,000 to $35,000** |
| ||
 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. View details | 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. View details | 7.99% – 35.99% APR | $5,000 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. View details | 5.99% – 24.99% APR | $2,500 to $35,000 |
| ||
 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.  View details | 7.99% – 29.99% 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. View details | 5.99% – 24.99% APR | $5,000 to $40,000 |
| ||
 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.  View details | 7.04% – 35.89% APR | $1,000 to $40,000 |
| ||
 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. View details | 7.99% – 35.99% APR | $2,000 to $36,500 |
| ||
 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. View details | 4.49% – 19.99% 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. View details | 6.99% – 24.99% APR1 | $3,500 to $40,0002 |
| ||
 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. View details | 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. View details | 7.74% – 17.99% APR | $600 to $50,000 (depending on loan term) |
| ||
 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. View details | 6.99% – 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. View details | 5.99% – 35.99% APR | $3,500 to $40,000 |
| ||
 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. View details | 7.99% – 23.43% APR10 | $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. View details | 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.  View details | 7.46% – 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. View details | 5.4% – 35.99% APR4 | $1,000 to $50,0005 |
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| Compare rates from these lenders without affecting your credit score. 100% free! Compare Now Trustpilot | ||
| All APRs reflect autopay and loyalty discounts where available | LightStream disclosure | 10SoFi Disclosures | Read more about Rates and Terms |
Cons of consolidating credit card debt
Consolidating credit card debt has obvious benefits for the right person, but it’s not for everyone. Here are some drawbacks to consider:
Won’t necessarily lower your interest rate
To get a lower interest rate than what you’re currently paying, you’ll typically need good to excellent credit. If your debt has had an adverse effect on your credit score, you might not qualify for a better rate.
Related Read: Personal Loan Requirements
Could take longer to repay
Borrowing money to consolidate your credit card debt doesn’t always get your debt paid off faster, especially if you opt for a loan with a longer repayment term. While this might lower your monthly payment amount, it’ll take you longer to pay off the debt and you could pay more in interest.
Could raise red flags on your credit report
When you apply for new credit, the lender will perform a hard credit inquiry, which can temporarily lower your score. If you apply for too many loan products in a short period of time, it could suggest to future creditors that you’re struggling to manage your debt.
Might wind up in more debt
Consolidating credit card debt is only beneficial if you avoid accumulating more debt. If having credit available on your cards tempts you to overspend, you could wind up with twice as much debt as you started with.
Ways to consolidate credit card debt
There’s no one-size-fits-all solution for consolidating credit card debt. Consider these options to find one that works for you:
- Personal loan: A secured or unsecured personal loan can get you the cash you need to pay off your cards, leaving you with just one balance — and ideally a lower interest rate. While secured loans require collateral, they also tend to have lower rates and are easier to qualify for than unsecured loans. But if you can’t keep up with payments, the lender can take your collateral.
- Tap into home equity: If you own your home and have enough equity, you can borrow against it to pay off your credit cards. A cash-out refinance might be the way to go if a new mortgage would have benefits beyond paying off your credit card debt; otherwise, consider a home equity loan or line of credit. Either way, consider how loan fees affect your potential savings.
- Balance transfer credit card: A balance transfer credit card with a 0% introductory interest rate is like an interest-free loan — but with caveats. First, that 0% rate is temporary, and it could wind up being higher than your current rates once the introductory period ends. Also note that you could be charged a penalty rate on the entire balance if you miss a payment. And you typically need good to excellent credit to qualify for a 0% APR credit card.
- Borrow against your 401(k): Some 401(k) plans allow participants to borrow against their vested balances. The loans are interest-free because it’s your money. But taking out a 401(k) loan is rarely a good idea. You’ll lose out on appreciation for the borrowed amount, and you may have to repay the full loan if you leave your employer. Failure to repay the loan could result in a 10% early withdrawal penalty.
- Credit counseling: A credit counselor might be able to negotiate reduced interest rates on your behalf and create a debt management plan that combines your bills into one monthly payment. But they sometimes charge fees, and you might have to agree not to use your cards while you’re in the program. The U.S. Department of Justice maintains a list of approved credit counseling agencies.
- Make your own repayment plan: If you can afford to make more than your minimum credit card payments, you might try consolidating credit card debt on your own, using the debt snowball method. With this strategy, you’ll make minimum payments on all your cards except the one with the lowest balance — and then pay as much as you can against the lowest balance. When that’s paid off, shift the payments to the next-lowest balance and continue until you’ve knocked out all your debt. You can also use the debt avalanche method, which focuses on paying down your card with the highest interest rate first.
Should I consolidate my credit card debt?
Whether it makes sense to consolidate your credit card debt depends on a number of factors, such as your budget, your spending habits, and your credit.
Credit card debt consolidation might be a good option if you qualify for a low-interest loan or 0% APR balance transfer credit card — especially if you can pay enough each month to eliminate the debt before any promotional period ends. You should also be in a position where you don’t rely on credit cards for necessary expenses, like utility bills and groceries.
If you don’t qualify for lower interest, or the credit you qualify for would stretch out your debt payments longer, consolidating the debt probably won’t work in your favor. In this case, you might be best off managing the debt yourself, if you can afford it. And if you can’t, contact your creditors or an approved credit counselor for help.
Keep Reading: Using the Debt Avalanche Method to Pay Off Debt
About the author 
Daria Uhlig
Daria Uhlig is a contributor to Credible who covers mortgage and real estate. Her work has appeared in publications like The Motley Fool, USA Today, MSN Money, CNBC, and Yahoo! Finance.
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