How to Consolidate Credit Card Debt (And Choose the Best Option for You)
Credit card debt consolidation allows you to combine multiple credit card balances into one loan, often through a personal loan, balance transfer card or home equity loan.
Debt consolidation makes sense if you get a lower interest rate, which can help you save money in the long run. Additionally, consolidation can simplify your finances by turning multiple monthly payments into a single financial obligation.
It’s a solid option for those who are balancing several credit card payments each month. But in order to make the most of the opportunity, you’ll need to pick the right method, which varies based on your situation.
Explore debt consolidation options and how to choose the right one for you in this guide.
What Is Credit Card Debt Consolidation?
Credit card debt consolidation involves combining multiple credit card balances into one payment, typically by paying off all balances with one loan then paying back that loan. Consolidation allows you to stop juggling multiple payments, which can make paying down debt more simple.
You can consolidate credit card debt in a few ways, including a personal loan, a balance transfer card, a home equity loan, a debt management plan or a debt settlement plan.
Ultimately, the goal is to walk away with one monthly payment to manage and one interest rate to worry about. Ideally, that interest rate is lower than what you were paying before.
If you want even more tips on paying down your credit card balances, read our guide on how to pay off credit card debt in 2026.
Is Consolidating Credit Card Debt a Good Idea?
Consolidating your credit card debt could be a good idea if you’re having trouble managing multiple payments or high interest rates. Here’s a look at a few situations when it might make sense:
- Your interest rates are high. Credit cards tend to have high interest rates — about 18%-25% or more. If you have significant credit card debt with APRs in the double-digits, consolidating to a lower interest rate could be a game-changer.
- You’re struggling to juggle multiple payments. Keeping up with several credit card payments can feel overwhelming. Streamlining your payments could help you manage your finances with less stress.
- Getting out of debt is your primary financial goal. This can help speed up the repayment process.
- You want a clear repayment plan. Consolidating multiple credit card balances into a single loan should give a clearer repayment timeline, which might help motivate you to stay on track.
Best Ways to Consolidate Credit Card Debt
As with most personal finance decisions, the best debt consolidation strategy varies based on your situation and goals.
Below are some common ways to consolidate credit card debt, along with when each option works best.
Quick Comparison of Consolidation Options
| Option | Best For | Credit Needed | Typical Fees |
|---|---|---|---|
Personal Loan |
Fixed timeline payoff |
Fair–Excellent |
1%–8% origination |
0% Balance Transfer |
Paying off in 12–21 months |
Good–Excellent |
3%–5% transfer fee |
Home Equity Loan |
Large balances, homeowners with sufficient equity |
Good+ |
Closing costs, typically 3% to 6% of loan amount |
Debt Management Plan |
Structured repayment help |
Any |
Monthly admin fee, typically less than $75 |
Debt Settlement |
Severe hardship |
Any |
15%–25% of enrolled debt |
Personal Loans
Best for: Borrowers with fair to excellent credit who want a more structured payoff plan.
Typical APRs: Depends on credit profile, but the average was 11.65% in November 2025.
When you use a personal loan to consolidate credit card debt, you’ll pay off multiple credit card balances with a single loan. Typically, personal loans offer set terms and a fixed monthly payment.
While personal loans often carry lower interest rates than credit cards, APRs might not be as low as they could be for borrowers with credit scores below 670. Additionally, many personal loans carry origination fees of 1% to 8% of the loan amount, which can increase your overall repayment costs.
Marketplaces are helpful tools that match you with the type of loan you’re looking for. Some of our favorites include MoneyLion, AmONE and My Lending Wallet.
0% Balance Transfer Credit Cards
Best for: Borrowers seeking to pay down debt aggressively and in-full within 12-21 months.
Typical APRs: 0% introductory APR.
If you’re dealing with high-interest credit card debt, a 0% balance transfer credit card offer could offer a reprieve. A 0% balance transfer credit card lets you transfer existing credit card balances to a new card. Generally, these cards come with a promotional 0% introductory APR, which is significantly lower than the average credit card APR of 23.72%, for a set period.
For example, you might enjoy a 0% APR on your balance for 15 months before the credit card issuer pushes the rate back into a normal range. If pursuing this option, expect the issuer to charge a transfer fee of 3% to 5% of your transferred balance.
You’ll usually need a credit score around 700 to get approved, but balance transfer credit cards offer a 0% interest rate on transfers for 12 to 21 months with credit limits up to $100,000.
If you have good or excellent credit, you also could apply for a zero- or low-interest credit card, and if approved, transfer the balance from your high-interest cards.
But if you miss a payment, that could affect the promotional rate, so make sure to stay on schedule.
Home Equity Loans
Best for: Homeowners with significant equity and reliable income.
Typical APRs: Depends on credit profile, but the average for a five-year loan was 7.84%, as of March 4, 2026.
Homeowners dealing with credit card debt might have the option of using a home equity loan to consolidate their credit card debt. Essentially, a home equity loan is a type of second mortgage that uses your home as collateral. With that, you can expect significantly lower interest rates than unsecured credit card debt.
LendingTree also is an option for home equity loans. You can compare home equity rates from multiple lenders on their website. LendingTree isn’t a bank and can’t guarantee loan approvals, but they can help you find the rate you’re looking for.
Also, remember that if you can’t keep up with the home equity loan payments, the lender could foreclose on your house.
Debt Management Plans
Best for: Struggling borrowers who want a structured helping hand.
Typical fee: Up to $75 per month.
A debt management plan involves consolidating your debts through a nonprofit credit counseling agency. In some situations, the agency will work to lower your interest rates by negotiating with your lenders. But, generally, this strategy involves repaying your full loan balances.
In addition to repaying your loans, you’ll also pay the credit counseling agency a monthly fee for helping you through this process.
Debt Settlement (High Risk Option)
Best for: Borrowers currently facing collections.
Typical fee: 15%–25% of enrolled debt.
If you’ve fallen so far behind on your credit card bills that you don’t think you’ll ever catch up, turning to a debt settlement company is one option. Instead of consolidating your credit card debt, this option involves reducing the debt with the help of a for-profit company that negotiates lump-sum payoffs on your behalf, like National Debt Relief.
While this can significantly reduce your credit card debt, it often damages your credit score and you could be taxed on the forgiven debt. It could take years to get your credit back on track after working with a debt settlement service. This should be a last resort.
Debt Consolidation Loan vs. Balance Transfer: What’s the Difference?
A debt consolidation loan involves signing up for fixed monthly payments over a set loan term. In contrast, a balance transfer involves shuffling your credit card balances onto a different credit card with a temporary 0% interest rate.
Generally, a debt consolidation loan makes more sense for borrowers with good credit who need more than 18 months to repay the balances. For anyone getting used to budgeting, the fixed monthly payments of a debt consolidation loan are also helpful.
If you have a manageable amount of credit card debt that you can repay within a credit card’s 0% introductory period, like 12 or 18 months, then a balance transfer might make more sense.
Compare the cost of interest and fees to determine which option will lead to more savings for you.
How Much Can You Actually Save?
The exact amount you can save with credit card debt consolidation will vary. But it’s possible to save thousands of dollars in interest charges if you choose to consolidate your debt.
For example, let’s say you have $10,000 in credit card debt with a 22% APR. If you make $200 monthly payments, you’ll face $17,355.81 in total interest charges over time. But if you refinance to a personal loan with a three-year term and 11% interest rate, you’ll face a $327.39 monthly payment and pay $1,785.94 in interest, saving you thousands.
What Credit Score Do You Need?
Lenders tend to offer borrowers with good to excellent credit the best rates. If you want to consolidate your credit card debt and get a decent rate, try to get a credit score of 670 or higher.
In some cases, lenders might be willing to accept a lower credit score. After all, lenders take other details, like your income and payment history, into account when making lending decisions.
Does Consolidation Hurt Your Credit?
When you apply for a debt consolidation loan, you can expect your credit score to dip. That’s because a hard credit inquiry has a negative impact on your credit score. However, in some cases, borrowers see their credit scores recover over time after making on-time payments and reducing credit utilization.
When Debt Consolidation Is NOT the Right Move
It likely won’t make sense to consolidate your debt if you can’t find a loan option with a lower interest rate than your current loans and you’re managing multiple payments OK.
Debt consolidation is ideal if you’re ready to make some big changes to your financial situation. If you aren’t ready to evaluate your spending and determine how you’ve fallen into debt in the first place, then debt consolidation likely won’t improve your finances in the long run.
So, if you aren’t ready to reduce spending on your credit cards, you can’t get a loan that lowers your interest rate and you have no problem keeping up with multiple payments, then debt consolidation might not be for you.
How to Consolidate Credit Card Debt (Step-by-Step)
Are you ready to consolidate your credit card debt? Use the following steps as a guide:
- Look over your credit card balances, minimum payments and interest rates.
- Check your credit score.
- Add up your credit card balances.
- Shop around for the right debt consolidation solution, considering APRs, fees and your goals.
- Apply for the loan offering the right option for you.
- Accept the loan funds.
- Use the loan funds to pay off your credit card balance or transfer your balances to a new credit card.
- Stop using your paid-off cards.
Compare Our Recommended Options
These tools can help you manage your debt:
| Offer | What It Is | What It Can Do | Get Started |
|---|---|---|---|
| MoneyLion | Debt Consolidation Loan | Match you with a low-interest loan | Get The Money You Need |
| National Debt Relief | Debt Settlement Company | Potentially reduce how much you owe | See If You Qualify |
| My Lending Wallet | Loan Marketplace | Help you compare personal loans from multiple lenders | Find Your Best Rate |
| 0% Intro APR | Balance Transfer Card | Transfer the balance from your high-interest cards to low- or zero-interest ones | List of the Best Balance Transfer Cards |
Always verify terms directly with the issuer, as offers and rates change frequently.
Which Debt Consolidation Option Is Best?
| Situation | Best Option |
| Excellent credit, short payoff timeline | 0% balance transfer card |
| Fair–good credit and larger balances | Personal loan |
| Homeowner with significant equity | Home equity loan |
| Struggling with payments | Debt management plan |
FAQ About Credit Card Debt Consolidation
Because it generates a hard credit inquiry, consolidating your credit card debt may cause your credit score to dip. But, generally, making on-time payments will help you rebuild your credit quickly.
Every lender sets its own credit score requirements. While there’s not a universal minimum credit score requirement, most lenders prefer to work with borrowers who have at least fair credit.
If you’re looking for a longer loan term with fixed payments, a loan might be a better option. But if you want to pay down your debt during an introductory 0% interest period from a balance transfer credit card, that could offer a faster way to get out of debt. Ultimately, the best choice varies based on your goals.
Many debt consolidation lenders charge origination fees, which often range from 1% to 8%. Beyond the origination fee, you might face an application fee and interest charges.
Yes, it’s possible to consolidate credit card debt with bad credit. But keep in mind that a bad credit score might lead to higher APRs and limited savings.
Debt consolidation, which combines multiple debts into a single account, is one type of refinancing because you’ll replace your old loans. But, generally, refinancing refers to replacing a single loan with new terms.
Final Takeaway
Debt consolidation can help you pay off credit card debt that you’re struggling to keep up with by simplifying payments and lowering interest costs. Although it won’t wipe the slate clean, it offers a more structured path that saves you money in the long run. But it’s not the best plan for everyone. Before you jump into debt consolidation, review your current payments and interest rates to make sure it’s the right fit for your situation.
This article contains general information and explains options you may have, but it is not intended to be investment advice or a personal recommendation. We can't personalize articles for our readers, so your situation may vary from the one discussed here. Please seek a licensed professional for tax advice, legal advice, financial planning advice or investment advice.
