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How to Consolidate Credit Card Debt

Keeping track of your loans and all the monthly payments might be challenging. Regularly a cash holder has to plan a specific routing to avoid falling behind on credit card bills. High interests and spiky APRs also worsen the situation. Do you recognize yourself and struggle with financial management? A debt consolidation loan will be your backup solution.

The procedure provides several advantages. For instance, it offers lower interests and convenient payment conditions. Still, there are a variety of things that you should consider before applying. To learn more and find out how to choose the best option, keep reading attentively. We’ll share every piece of advice that you need to know!

Home Equity Loan or Line of Credit

Taking a home equity loan is a wise idea. Running errands around the house you might bump into some unexpected expenses. A line of credit would be a suitable option to pay off credit card debt or other mortgages. Those usually are given in lump sums that you have to return by even monthly payments. Make sure that you’re in a situation when the loan is really necessary.

The conditions are convenient. Though, including an interest-only deposit for the first 10 years. But you shouldn’t be worried due to repayment terms flexibility — they might be extended up to 30 years. Although home debt is relevant, there are some aspects cash holders should consider.

Pros Cons
  • Offers lower interest rates than personal loans
  • The loan is secured with your house, meaning you have a chance to lose it in case of default
  • Makes it possible to consolidate debt with larger figures
  • Only homeowners are eligible to receive credit approval. Qualified equity in their houses is a must.
  • Fixed annual percentage rates and monthly deposits

Balance Transfer Credit Card

Preven yourself from overpaying for the debt and start saving up. To achieve this goal, you might give a preference to balance transfer. Selecting this direction of debt consolidation won’t tale too much effort. Customers transfer money from their credit card to the newly opened account. The perk of it is lower interest and 0% APR level within a 12 – 24 months promotional period. Take into account that you’ll need to provide an excellent credit history — a minimum of 690 points. Although the balance transfer credit card works for your benefit. Somehow, it charges a 3% to 5% one-time fee for a transaction. Still, there is no reason to panic. Most likely, you’ll save up the approximate figures on interest over time.

Pros Cons
  • 0% APR intro promotion that can be extended up to 20 months or even longer
  • To be eligible, customers have to show excellent credit scores
  • Much lower fees than you’re paying with your card currently
  • Requires a balance transfer fee
  • The credit card has variable APR, meaning it will kick after the promotional term is done

Credit Card Debt Consolidation Loan

There is another way debt consolidation work. Apply for an unsecured credit card consolidation from online lenders. Banks or credit agencies suit too. The purpose remains the same — getting a better term and lower APRs. Still, you’d like to review those options first, analyze and compare them:

  • Bank debts are suitable for customers with good to excellent credit score. They provide decent fee discounts and offer more favorable conditions.
  • Online lenders allow cash holders pre-qualify for a loan, meaning you can test it and see whether you like it or not. It’s a useful trick that agencies and banks don’t have.
  • Still, with a fair credit history, you’d prefer to apply to a credit union. It accepts customers even with bad credit and provides them with relatively lower APR.
Pros Cons
  • Repayment terms are fixed
  • A customer has to be a member of credit agencies to receive the loan
  • Convenient conditions for customers with good to excellent credit  scores
  • Might be challenging to get eligibility with a bad credit
  • Availability of direct payments
  • Creating credit card balances might charge a registration fee

Consider 401(k) Savings

The perk of 401(k) debt is that the loan won’t be indicated on your credit report, which means no hurt to the score. However, think twice before selecting it. Many cash holders don’t know the impact of this debt on their future retirement. If a 401(k) employer sponsors your account, it’s recommended not to get involved with borrowing from it. Try not to fall behind on your credit card payments.

You’ll experience significant consequences. Usually, customers are obliged to pay taxes. Besides, they cover large penalties for missed deposits. You might consider the 401(k) loan, but only when you’re done with the balance cards and other mortgages.

Pros Cons
  • Doesn’t remain on your report
  • The loan might damage the retirement savings
  • Offers lower APRs than personal loans
  • Heavy and large penalties for being unable to pay
  • You can’t extend the debt any longer if you’re unemployed

Smart Debt Credit Card Consolidation Management Plan

A management plan is a smart decision for those who have bad to fair scores and want to save up on interest. You’ll be able to combine all the existing loans into one and regularly repay the fixed rates. All you need to do is decent credit card consolidation schedule. It’s also easier to keep track of spending by holding them in the same place. In comparison to other credit scoring models, the management plan doesn’t hurt the score.

Moreover, the extension of repayment terms goes up to 5 years. So there will be enough time to return the borrowed sum.

Pros Cons
  • Have no impact on the credit records
  • The extension of the debt might be set to 3 or even 5 years
  • Decreases the APR and fee levels up to half
  • Compatible only with unsecured debts
  • Offers fixed monthly rates
  • Sometimes charges registration fee

What is Credit Card Debt Consolidation?

Credit card debt consolidation is the form of debt relief, which keeps bills, credits, and payments in the same place. It helps to combine multiple debts with high interest into a single one. The main benefits are one monthly payment, a fixed lower interest rate, and terms. Basically, you can use one debt to repay the other but with lower fees and under better circumstances. With the proper debt management plan, cash holders will get the opportunity to pay off the borrowed sum extensively.

They will even improve their credit score. You can diversify the payment and make regular deposits. This fact leaves a positive mark on your credit history. Once you consolidate your small personal loans, you’ll see how convenient and simple it is.

How to Consolidate Credit Card Debt?

There are plenty of consolidation options a person can choose. Yet, those come to the same sole purpose. Everyone uses one consolidation loan to pay off another one. Besides under more favorable conditions. The procedure can be done by applying for home equity loans or personal loans. You can also transfer the balance to a newly made credit card. Building a management plan with a credit counseling assistant would be suitable too. By consolidating credit card debt, you benefit a lot. Doesn’t matter whether you’re one of the bad credit borrowers or can brag with an excellent score. The procedure will help you to manage financial issues and get back on track.

What to Consider Before Deciding to Consolidate Debts?

The offer of credit card consolidation sounds pretty intriguing and useful. However, try not to rush things and think before you do. There is a wide range of aspects that have to be considered in the first place.Start by checking your credit score. Remember that customers aren’t obliged to post collateral on unsecured personal loans. It means lenders pay precise attention to your credit score. They rely on it while rating the banking eligibility. Afterward, make some counting. Make sure that you have certain figures that you want to consolidate.

This way, you won’t diverge, sticking to regular debt repayment. Use the possibility and pre-qualify for a consolidation loan by analyzing different APRs. It’s a good way of testing debt offers without a formal application. Anyways, it won’t damage the credit score. Don’t forget that you can negotiate the conditions of the personal loan with lenders. This option is also worth trying before deciding to consolidate debts.


Keeping your bills in order and taking all the payments into account is a hard task. Debt consolidation is a decent tool that will help you to stay tuned and avoid falling behind on loans. The process is easy and offers a variety of options. Cash holder can either pick a balance transfer and combine all the funds in one place. They make a smart management plan, take a personal loan, etc.

Yet, take time to compare and analyze options. Don’t rush because you risk losing the better deal. Checking your credit records and determining what amount of loan you need is a perfect start!


  • Should I consolidate debt?

Always look for a personal loan with a lower interest rate and better conditions. It’s a good idea to apply for debt consolidation. You’ll benefit by paying a couple of times less. You will pay off the loan much faster, increasing your total credit score.

  • What is debt consolidation?

Basically, it is a debt management plan which allows you to combine several loans into one. By doing this procedure, you can get back to regular monthly payments. But returning the borrowing sum with fixed terms and rates. Moreover, it will reduce the high-interest charges and soften the life of the debt.

  • Are there other options for consolidating credit cards?

There are many credit card consolidation ways. Each cash holder can select the one that works best for them. For example, applying for a personal loan or home equity loan is one way around. You can also establish a monthly payment plan. Transfer funds to the new credit card or consult with the bank assistant.

  • Does a consolidation personal loan close your credit cards?

Usually, the consolidation loan or balance transfer cards won’t close your credit card. The procedure is up to the cash holder. However, the card might be canceled only on the condition that you use it no longer for taking new loans.

  • Do debt consolidation loans hurt my credit score?

Debt consolidation refers to an unsecured personal loan. It means that lenders have to go through a hard credit check. Those actions might hurt your credit score but only temporarily. You will redeem the credit again shortly after. Regular monthly payment and a responsible approach is the solution.

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