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From the Experts at

5 Tips for Consolidating Credit Card Debt

by Lucy Lazarony

5 Tips for Consolidating Credit Card Debt

Feeling weighed down by high-interest credit card balances? These debt consolidation tips can help.

1. Check Your Credit

Review your credit reports and correct any errors. An error on your credit report could prevent you from qualifying for the debt consolidation help that you need.’s free Credit Report Card can help you understand what’s inside your credit report, and gives you your free credit scores, too. Get a free annual credit report from each of the three national credit reporting agencies.

2. Consolidate to a Low-Interest Credit Card

If you’ve got good credit, look for a credit card with a low-interest rate. Transfer high-interest rate credit card balances to a single card and save money on monthly finance charges as you pay down your debt. For consumers with good credit there are several balance-transfer and low-interest rate credit card offers available.

3. Get a Loan From a Local Bank or Credit Union

You may be able to consolidate your debt with a personal loan from your bank or credit union. Ask the loan officer at your financial institution for more information.

Before applying for a loan, ask about the lender’s credit requirements. Is there a minimum credit score for qualifying for a loan?

4. Get a Consolidation Loan From an Online Lender

Choose a reputable lender when applying for a debt consolidation loan online. Check out any potential online lenders with the Better Business Bureau and look for complaints. And check to see if a lender is registered to do business in your state by contacting your state Attorney General’s office or your state’s Department of Banking or Financial Regulation.

Beware of any lender that promises to make you a loan regardless of your credit. Stay clear of websites and lenders that charge you big upfront fees for a debt consolidation loan.

5. Sign Up for a Debt Management Plan

Reach out to a credit counseling agency about a debt management plan. With a debt management plan, you make one monthly payment to a credit counseling agency and the agency pays each of your credit card lenders. A lender may lower the interest rate on your credit card balance when you participate in a debt management plan.

  • Gerri Detweiler

    It can. However, credit counseling doesn’t usually affect credit scores the way most people think. Credit scoring models generally don’t take into account the fact that an account is being paid through a Debt Management Plan.

    However, accounts that are accepted into a credit counseling agency’s debt management program will be closed. and will be updated on your credit report to show that the account was closed. Closing active credit accounts can have a negative impact on your score. More about that here:

    Does Closing Your Credit Card Account Affect Your Credit Score?

    Over time, paying off your debt this way can have a positive impact on your credit since you’ll be largely debt-free in 3-5 years. So if you find yourself in a situation where it makes sense to get help with your debt, don’t hesitate to get it.

  • Heather

    I have $15,000 in high interest credit card debt. I have good credit and a credit score over 700. Would it be better to get a personal loan from my credit union or transfer the balances onto 0% interest credit card(s)? What factors should I consider for each? Which source would affect my credit score more?

    • Credit Experts

      Heather —
      It’s hard to know the answer because it’s impossible to know your exact situation. A credit score factors in both non-revolving (car loans or mortgages, for example) and revolving (usually credit cards) credit. Diversity of credit has an effect, as do on-time payments and the amount of credit you access versus your credit limit (under 10% is best of all, but under 30% is considered acceptable).

      One idea might be to split the difference and do both. You’ll want to use less than 30% of your credit card limit (thus you’d need a limit of $50,000 on a balance-transfer card to do what you’re considering without dinging your score).

      You can read more about debt payoff strategies and credit scores here:
      5 Ways To Get Out of Debt: Which Will Work for You?
      How to Build Credit the Smart Way
      Making Sense of Your Credit Score

  • Gerri Detweiler

    There is no magic ratio that is “good” but generally if your balances on any of your cards start creeping above 20 – 25% of your available credit, you may see an impact on your scores. Have you checked your credit scores to see how this factor is impacting your credit? Here’s how to check and monitor your credit score for free. As for the new account, it may have an impact on your score but usually for most people that levels out once the bills are paid on time for a few months. If it will save you a good chunk of money it may be worth it!

  • Deedilly

    Trying to get a little bit of business advice, hope someone can help. We are struggling to make it through our slow months right now. We have about $100,000 in business debt currently active and all in good standing, we have never made a late payment. But we are getting buried with making sure we are paying all of these bills on time while still being able to order products to keep the business fully functional. We are scared we are heading towards bankruptcy or even closure. Would a debt consolidation company be able to help us? Or does it seem we are too far gone? I guess I was hoping with a debt consolidation company we could lower our monthly burden, stretching out our payment to 48-60 months.

    • Michael Bovee

      It is possible to consolidate business accounts, though most policies banks have in this area favor consumer debts.

      How many of the business accounts were personally guaranteed?
      Who are the lenders?

  • Going Crazy

    I have found myself in a debt loop. I got a loan to payoff my credit card debt and then something happened with our house and I racked it back up. So now I’m in this constant loop of trying to get it all paid off but have to use my credit cards because I have used my whole paycheck to pay my bills. I tried doing another little loan but it didn’t help much and now I have that debt too. Where can I go to get a personal loan that will give me the amount I need without telling me I have too much credit card debt when thats the purpose of the loan!

  • Credit Experts

    Have you considered taking out a personal loan and paying off your creditors with that? This tool from can help you explore the option and search for a lender: Personal Loans

  • Gerri Detweiler

    What kind of loans are you talking about? If they are federal student loans, you may be able to get them forgiven due to your disability. If they are consumer debts, you may want to look into bankruptcy. You can likely file by yourself without your husband.

  • Gerri Detweiler

    We’re so sorry to hear what you’ve been through. I will email you with some additional suggestions.

  • Going Crazy

    We have a budget and unfortunately have nothing of value to sell. I have to have a reliable vehicle to go to work and to take the kids to school. Can’t stand the mall, thank goodness!!! We make our own coffee. We save for months to have pizza or a family outing. We are very modest so we only have needs, wants went away when we had my kids. I am looking for a part time job but I want to have one day off a week to spend with my kids and thats apparently a problem for some employers. I’m not giving up and I will win this I just needed to see if anyone had an idea I haven’t already looked into. Thank you!

    • Credit Experts

      Dear Going Crazy —
      Trying to cut the “fat” out of an already lean budget can be almost impossible. Sometimes the solution really is additional income, and it sounds as if you’ve reached that conclusion for yourself. Trimming a budget is much easier when the budget hasn’t already been cut to the bone. Good luck, and we admire your determination.

  • Credit Experts

    Have you considered a debt management plan? It might be your best hope of paying off a debt that large on your income. You can find more information here:
    Is a Debt Management Plan Right for You?

  • Jd086

    Can taking out a personal loan to pay off a credit card hurt my credit score?

  • Gerri Detweiler

    Consolidating the debt probably won’t hurt your credit scores over the long run, but there could be a short-term impact from the new loan with a balance. So I can’t guarantee that your scores won’t dip when you do this. If your scores are strong enough to get the lease now you may want to go ahead and do that. If not you may be taking something of a chance – it could go either way. Will Debt Consolidation Help or Hurt Your Credit?

    • Gerri Detweiler


      I doubt that the 10% utilization is creating much of a problem, but since you asked for a suggestion I was trying to provide something you could try. I’m sorry if it frustrated you even further.

      It’s really hard for me to diagnose someone’s credit when I just know a few facts. There are so many different factors that go into the score, and they change every single time the score is calculated that it’s hard to say exactly what’s causing the issue.

  • Gerri Detweiler


    I don’t quite understand your situation but it sounds like you owe about $10,700 in high interest credit card debt. Is that right? If you can get into a debt management plan to pay off all that debt at a lower interest rate, and the monthly payment on the DMP is affordable, I would say go for that and forget about this 22% interest loan which is very expensive.

  • Credit Experts

    You need to work to get credit card utilization down below 30% (below 10% would be even better). But high utilization alone should not have brought your score down quite so low. Here’s how to get your free credit score along with a personalized plan for improving it. Because the scores come from information in your credit reports, you should also check those for errors and dispute any information that is inaccurate. Here’s how to get your free annual credit reports.

  • Gerri Detweiler

    Paying off debt in collections won’t help your credit scores in the short term. I would suggest you start by reading these articles and then if you still have specific questions you can post them there. The 7 Biggest Questions About Debt Collections & Your Credit and Does Your Old Debt Have an Expiration Date?

  • Gerri Detweiler

    If you can get a personal loan to consolidate that debt, and if it is reported to the credit bureaus as an installment loan (not revolving), then you may see your credit scores go up. We wrote more about that here: Will Debt Consolidation Help or Hurt Your Credit?

  • Joshua

    Hi Steven, so I have 3 open accounts with 0 balance and 2 closed accounts. I don’t know why they still open but are you saying that it is actually a good thing to have them there?

  • Credit Experts

    Steven —
    Be sure that you are dealing with a reputable company. And yes, consolidation can hurt your credit. On the other hand, it can get you out of debt and lower your interest rates. You can read more here:
    Will Debt Consolidation Help or Hurt Your Credit?
    How to Rebuild Credit

  • Anna

    I have about $3200 on one credit card with an APR of 22% and I make monthly payments of $100. Apparently there is no progress in my payments though because I also get charged $80 for interest and credit defense monthly as well. Therefore after everything I basically am left with $20 in total. Whatever I put in, 80% of it comes right out.
    Now, my husband took out a personal loan of $5000 with APR of 36% for our wedding. I was not working at the time and his credit score wasnt all that great so we were desperate. He pays $200 a month and it is a 5 year term which means we will have paid a total of $12000.
    We both have income now and my credit score is pretty fair and when I tried to consolidate the debt above a few months ago I got denied. Reasoning was they wanted to see more effort on our end, more payments put in. Well how do we show progress if it all goes to interest and doesnt make a dent at all? What do you suggest us do? Should I try again?

    • Gerri Detweiler

      Can you be more specific about your attempt to consolidate? Who turned you down? Did they give you your credit score and the reason for decline? Or are you saying your current lender didn’t want to consolidate?

  • Bill

    If I’m in a debt management plan, can I still keep one credit card alive, in case I need it for airfare or other situations that require a credit card?

    • Credit Experts

      Ask a financial counselor with the service you use.

  • Anna

    Gerri Detweiler, i tried reposting to you, but can you please answer this –

    I applied at my bank and at a credit union and both declined me. My credit score was provided with a fair rating but then the reason was that the amount of debt between us was too high, roughly 10k. Therefore they wanted to see more effort put in first. We were told to reapply again in a few months time when we had that under control. My payments were always on time and so I dont know how I am suppose to show effort if that amount of debt is always going to be the same due to interest. Hope that made sense.

    • Gerri Detweiler


      Apologies for the delayed reply. We’ve received a lot of questions in the past few days!

      It sounds like you are in a Catch-22 – you can’t pay down your debt without consolidating, and you can’t consolidate until you pay down your debt. That makes me think that you could be a good candidate for credit counseling. A credit counseling agency does not care about your credit scores. Your interest rates and payments will likely be reduced, and you will have a plan for paying back your debt in a reasonable period of time. We talked about that more in this article: Does Credit Counseling Work?

  • Helpme77

    I have $50,000 in credit card debt due to the economy and job loss over the last few years. Currently paying a total of $1600, about $350 over the minimum. Never been late, credit scores between 730 and 760. We’re now self employed and hard to show real income. Suggestions? The 19% to 29% is a killer.

    • Gerri Detweiler

      Have you thought about contacting a credit counseling agency? It sounds like you could be an ideal candidate. This article may help: Does Credit Counseling Work?

      • Helpme77

        Doesn’t your credit report get dinged when signing up with a credit counseling agency?

        • Gerri Detweiler

          Not as much as most people think. You do close your accounts, but it’s not as bad as bankruptcy which most people seem to think it is. (Again, I am talking about credit counseling not debt settlement.)

          • Helpme77

            My accounts are anywhere from 5 to 30 yrs old. Hate to close any since I know that will impact the credit scores. We have over $750k in IRA’s, can we use those as collateral against a personal loan?

          • Gerri Detweiler

            IRAs cannot be used as collateral for a personal loan unfortunately. This is a tough one. Have you tried talking with a local credit union or community bank? They may be able to take your retirement assets into account even if they can’t be used as collateral.

  • tyler

    I only have about 834 dollars in credit card debt but I also have a few bills past due, would it be smart for me to consolidate my debt.

    • Gerri Detweiler

      If you are currently past due it will likely be difficult to qualify for a consolidation loan at a decent interest rate. I doubt a credit counseling agency will help either though they may be able to help you review your budget to get some ideas for ways to tackle that debt (and the consultation should be free or very low cost).

  • Bill C.

    I have approximate $15,000 in high interest credit card debt and just spinning my wheels making minimum monthly payments. My credit is borderline fair/good. Would credit counseling help me pay this off quicker?? I just recently leased a brand new car for 3 years and when the time comes to trade it in or finance it and keep it I want my credit to be okay to do so. What do you recommend for me??

    • Credit Experts

      Bill —
      Assuming you are consistently paying on time (the No. 1 thing you can do to help your credit), take a look at your debt-to-available credit ratio. You want to get that to under 30% (under 10% is even better). Your credit mix is also a factor. If you have the income to make more than minimum payments, though, that is the best way to make an impact. You can read more here:
      Will Debt Consolidation Help or Hurt Your Credit?
      How to Improve Your Credit Score Without Debt

  • Jillian

    What if I am a stay at home mom with previous credit card debt? Will I be able to use our household income to prove we can pay but keep my husband’s credit out of the picture?

  • marcopolo

    I was laid off for 2 years 5 years ago. We walked away from our house 3-1/2 years because we couldn’t afford to live in it. I’ve had steady employment for the past 3 years. But we’ve built up 45,000 in credit card debt. My credit score is currently 625. I have no problem paying pack the full amount I owe to the credit card companies but I would like to consolidate them. What can I do? My parents transferred a house they owned into my name and it’s paid off. Can I use that as collateral?

    • Credit Experts

      By collateral, do you mean securing the loan with the equity in the home? If you go that route, you would be turning unsecured debt into a debt secured by a home, putting the home at risk if you are unable to repay. You may also want to explore talking with a credit counselor about your options for a repayment plan.

  • jenna

    how do i get my credit score higher?

    • Credit Experts

      The best way is to be sure you are paying all your bills on time. And, if you have credit cards, try to keep your balance to less than 30% of your credit limit (less than 10% is even better). We suggest checking your credit score monthly (you can get two scores every 30 days from, along with personalized advice for improving your credit. Here’s how to monitor your credit score for free.

  • Softball42

    I have two credit cards, one from a credit union with just over 10% interest and one from Chase with 9.99% interest. I just asked the credit union to increase my credit line to $20k so I can consolidate the two, as I thought it’d be best to keep my credit union account. I have a credit card through Wells Fargo that has an $18k limit, but it’s zero’d out and I don’t use it. Will this hurt my credit score? It’s in the mid-700’s.

    • Credit Experts

      It might hurt your score. About 30% of your score is based on the amount of your available credit you use. If, for example, you have a credit line of $20,000 and you owe $10,000, you are using 50% of your available credit — and that will hurt your score. You want that percentage to be below 30 (and below 10% is even better). Your best bet may be to put a small, recurring charge on the Wells Fargo card and automate payment. That way, you will be using a tiny percentage of that credit line (and that is potentially helpful, so long as you pay on time). For more, see
      Does Closing Your Credit Card Account Affect Your Credit Score?.

  • Michelle

    I have about $10-11,000 in credit card debt. I am thinking about consolidating, however, after doing some research I’m not sure I want to go that route. I have a good creadit score and I do not want to hurt my credit score by having to close accounts, etc. However, I feel like I can’t make any progress with my credit cards due to interest, and I’m trying to avoid opening anymore credit cards that would have low or no interest. I’ve thought about taking out a bank loan to pay my credit cards off. Does this seem like it would be the best option for me? Do you suggest any other options?

    • Credit Experts

      That is for you to decide. You do have to weigh the certainty that your credit score would take a hit (and some time to rebuild) against the advantage of a program that will allow you to make progress and pay off your debts. A bank loan is another option. You could check on the interest rate . . . but you should do this knowing you will not run up credit card balances again. Otherwise, you end up in an even worse situation than you are in now.

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  • Meet Our Expert

    lucy_lazarony GravatarLucy Lazarony is a freelance personal finance writer. Her articles have been featured on Bankrate, MoneyRates, MSN Money, and The National Endowment for Financial Education. Prior to freelancing, she worked as a staff writer for Bankrate for seven years. She earned a bachelor's degree in journalism from the University of Florida and spent a summer as an international intern at Richmond, The American International University in London. She lives in South Florida.
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