Compare Options for Credit Card Debt Consolidation

Consolidated credit card debt is often easier and faster to pay off.

The minimum payment schedules on your credit cards are not designed to be efficient. They don’t help you pay off debt quickly. In fact, they keep you in debt as long as possible because that increases revenue for the credit card issuer. So, when minimum payments don’t work, credit card consolidation offers you a better way to repay what you owe.

What is credit card consolidation?

Learn how credit card consolidation combines multiple debts into one low-interest payment

Consolidation simply refers to the process of combining multiple debts into a single monthly payment. Instead of making payments to all your creditors individually, you roll all your debts into a single, simplified repayment plan. At the same time, you also work to reduce or eliminate the interest charges applied to your debt. This allows you to get out of debt faster, because more of each payment you make goes to eliminating principal.

There are three basic options that consolidate credit card debt; you can find more information on each solution further down this page.

SolutionDIY or AssistedHow It Works
Credit card balance transferDIYYou transfer the balances from your existing high interest rate credit cards to one with 0% APR on transfers.
Personal debt consolidation loanDIYYou take out a loan to pay off all your credit cards, leaving only the loan to repay.
Debt management programAssistedYou set up a debt repayment plan that works for your budget with the help of a certified credit counselor.

Why do these solutions work?

No matter which solution you choose, credit card consolidation works on a simple principle: If you reduce or eliminate interest charges, you speed up how fast you can pay off your debt.

Credit card interest rates eat up over half of every payment you make, and that’s if your rate is around 15%. If you have reward credit cards, rates tend to be higher than 20%. In this case, more than two thirds of every payment you make goes to accrued monthly interest charges.

Even if you add money onto your minimum payment or make fixed payments, it can take years to reach zero. On minimum payments, it can take decades.

Don’t believe us? Just test it out with your highest balance. If you don’t know your minimum payment schedule, choose 2%. That’s standard for most credit cards.



Credit card consolidation focuses on minimizing interest charges. That means more of each payment you make can go to paying off the debt you actually owe. This accelerates debt elimination, which means you can get out of debt faster. In addition, you often end up paying less each month than what you pay by keeping your debts separate.

3 Options for Credit Card Consolidation

Option 1: Balance transfer

This is a do-it-yourself option that requires a good to excellent credit score in order to be successful.

  1. You qualify for a balance transfer credit card based on your credit score.
  2. These cards offer 0% APR on balance transfers for a limited amount of time after you open the account.
  3. The better your credit, the longer the 0% APR introductory period.
  4. Once the account is open, you transfer your existing balances.
  5. You usually must pay a balance transfer fee on each balance you move; fees range from $3 to 3% of the balance moved.
  6. With your debt consolidated, you pay it off in the largest chunks possible.
  7. The goal is to eliminate your debt in-full during the interest-free period.

Learn more about balance transfers »

Option 2: Personal loan for debt consolidation

This is another do-it-yourself option for consolidation. You need good to excellent credit in order to use this solution effectively.

  1. You apply for an unsecured personal loan through your preferred lender.
  2. They evaluate your credit to determine eligibility and set your interest rate.
  3. You choose a term that offers monthly payments you can afford
    1. A shorter term means higher monthly payments, but lower total costs
    2. Longer terms mean lower monthly payments, but higher total costs because there are more months to apply interest charges.
  4. Once approved, the money gets disbursed to your creditors to pay off your balances.
  5. This leaves only the loan to repay

See if a consolidation loan is right for you »

Option 3: Debt management program

This is a professionally assisted way to consolidate debt. It’s the only solution that works regardless of your credit score. So, this is the only way to consolidate if you have bad credit.

  1. You request a free debt and budget evaluation from a certified credit counselor.
  2. They evaluate your debt, credit and budget to see which solutions will work in your situation.
  3. If the DIY solutions listed above aren’t feasible, they check to see if you’re eligible for a debt management program.
  4. As long as you have the means to make a reduced monthly credit card payment, you typically qualify.
  5. If you’re eligible, you and the counselor determine a consolidated monthly payment that you can afford.
  6. Then, they call each of your creditors to negotiate. The goals are:
    1. Get your creditors to agree to have their debt included in the program
    2. Negotiate to reduce or eliminate interest charges and penalties
  7. Once all your creditors sign off, the program starts
    1. You make one payment to the credit counseling agency each month
    2. They distribute the money amongst your creditors

Do you need help to consolidate your debt? »

This is one example of how a debt management plan helped a client consolidate credit card debt effectively:

Roxann from Wichita Falls, TX

Consolidated Credit was the best thing I could have ever done. They were honest, caring and understanding with me. I have recommended them over and over to others.

Where she started:

  • Total unsecured debt: $28,957.00
  • Estimated interest charges: $16,445.78
  • Time to payoff: 15 years, 4 months
  • Total monthly payments: $1,176.32

After DMP enrollment:

  • Average negotiated interest rate: 10.35%
  • Total interest charges: $3,594.00
  • Time to payoff: 4 years 3 months
  • Total monthly payment: $627.00
Time Saved:
11 years, 1 month
Monthly Savings:
$549.32
Interest Saved:
$12,851.78

How to decide which credit card consolidation option is the right one use

Choosing the right solution for consolidation is highly dependent on your unique financial situation. Credit will be a big factor, because do-it-yourself options aren’t viable with a bad credit score. Your budget and free cash flow matters because they determine what monthly payment you can afford.

Finally, the total amount of debt that you have to repay matters. DIY solutions are often not effective with larger volumes of debt. If you have more than $75,000 or $100,000 of debt to pay off, you probably will need help. That’s true regardless of your credit score.

Additional Resources to Help You Consolidate Debt Effectively.


Use our expert debt advice to find the help you need to consolidate credit cards into one easy payment

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