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Your Guide to Credit Card Debt Consolidation

June 15, 2023

0% APR Intro Offers | Personal LoanHELOC | FSB Consolidation Loans

What is Credit Card Consolidation?

Credit cards are an excellent tool for many reasons. When trying to build your credit, making on-time payments and keeping low balances can give us more buying power. If you travel a lot, using a credit card can come with perks, like extra miles or upgrades. Credit cards can also provide cash back on everyday purchases, giving us a little bit back at the end of each month for buying things like groceries and gas.

With so many appealing rewards and perks, it’s easy to see why, on average, American adults have three separate credit card accounts.

Managing multiple credit card accounts can be quite challenging, and figuring out how to pay off three balances can sometimes seem impossible. Credit card debt consolidation could be beneficial if you feel stuck in a never-ending cycle of juggling balances and interest rates.
Credit card consolidation is combining multiple balances across multiple credit cards combines all of the balances into one.

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The ideal consolidation outcome will give you one monthly payment and a lower APR, saving you money on the total interest paid. Here are some of the best ways to consolidate your credit card debt:

0% APR Intro Offers on Balance Transfer Cards

How does a 0% APR introductory offer on balance transfer cards help consolidate credit card debt?

While opening another credit card while trying to consolidate your cards may seem counterproductive, finding a 0% APR introductory rate and $0 annual fee balance transfer card is a great option. This card would allow you to transfer all your existing balances, giving you one balance and one payment.

While you’ll likely pay balance transfer fees (typically 3%-5%), you’ll get 0% APR and won’t accrue any interest during the introductory period (typically 12-20 months). This option is excellent if you plan on making larger payments and feel you can pay the entirety of your balance before the end of the introductory period.

There are a few downsides to a balance transfer card:

  • Typically need good to excellent credit to qualify
  • For those who are approved, there is also the obstacle of the approved credit limit
    • You may be approved for an amount that is less than the amount of debt you need to consolidate, meaning you’d still be responsible for payments on the balances that you couldn’t transfer

Personal Loan

What are the advantages of using a personal loan for debt consolidation?

A personal loan is one of the most popular ways to consolidate debt. Personal loans are easy to apply for, often offer flexible repayment terms, and have a fixed monthly payment.

Personal loans do have a few drawbacks:

  • Interest rates are often directly correlated with your credit score
  • Personal loans can require loan origination fees, which would be an additional amount added to the final loan balance


If you have equity built up in your home, you can use that equity to consolidate debt. Home equity builds when your home increases in value or you’ve paid down a significant chunk of your mortgage. You can then use this equity to take out a Home Equity Line of Credit (HELOC) and then use it to consolidate your higher-interest debt.

What are the advantages of using a HELOC for debt consolidation?

Since a HELOC uses your home as collateral, you’ll often get a much lower interest rate than you would with other loan types.

Be sure to speak with your lender regarding any additional fees or your accountant about tax considerations that may accompany a HELOC, as this could add to your loan amount.

Debt Consolidation Programs

Unlike the above options, a debt consolidation program does not pay off each balance, but how does a debt consolidation program work?

This program instead works with your creditors to make all of your monthly payments while you make one fixed monthly payment to the program. This option allows you to make lower payments than you would if you made all the payments individually. Representatives from these programs work with creditors to reduce interest rates, late fees, and penalty fees.

If you explore working with a debt consolidation program, read all the fine print. Some creditors will require that your account be closed before consolidation, and some programs charge monthly fees to use their services.


Consolidating your credit card debt could benefit your overall financial wellness, especially if keeping up with payment due dates and balances is challenging. Remember, the approach to debt consolidation is not one-size-fits-all. It’s crucial that whatever method you use to get a grip on your debts equips you with one monthly payment and a lower interest rate. Setting yourself up for success by choosing the most beneficial program for you is the first step toward becoming debt-free!

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Financial Resource CenterManaging Your Credit Card DebtContact a Banker


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