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Every time you open a credit card, you’ll get a credit limit, billing date, interest rate, and other terms you’ll need to keep track of if you want to maintain a good credit score. With all of the things you have to keep tabs on, it’s no wonder your finances can quickly spin out of control when you have debt on several different credit cards.

Many people choose to consolidate their debt to simplify the payment process. But is this the best route for everyone? Check out our guide to explore your options and learn more about how to consolidate credit card debt.

1. Credit Counseling Organization

Trying to consolidate debt can be overwhelming, so it’s smart to go to an organization for help and create a plan. Non-profit credit counseling organizations exist to help you do just that. Find a reputable organization in your area by checking with the state attorney general’s office and consumer protection agency.

Once you’ve found the right option, the organization will help you set up a debt-management plan. Keep in mind that you may have to pay a fee for these services, and you won’t be able to apply for any new credit cards or use existing credit once you set up the plan.

2. A Trusted Friend or Family Member

Turning to friends and family for financial help can get complicated quickly, but it may be a good option if you are in a tough situation. Consider asking a trusted family member who you know has the means to offer you a loan. Then make sure you have a clear-cut plan for how you’ll repay the person, and stick to it. If you don’t pay the loan back promptly, you may be putting your relationship and their financial situation on the line.

3. Balance Transfer Credit Card

We understand that you’re probably wary of opening up yet another line of credit—but a balance transfer credit card is one option for how to consolidate credit card debt without paying any interest for a while. Once you open the card, you’ll be able to move over balances from several credit card accounts to one card.

You won’t have to pay interest during the introductory period, but after the promotional phase, you’ll start paying interest at a regular rate. You might also have to pay a balance transfer fee, further adding to your overall debt. The amount you transfer must also be lower than your credit limit.

4. Personal Loan

Personal loans offer a convenient way to get access to cash. You can use those funds to quickly pay off your credit card balances, then make one payment to the personal loan. Most personal loans are easy to apply for, and once you’re approved, the lender will deposit the money directly to your bank account within a few days. Interest rates on a personal loan might even be lower than the interest rates on your credit card debt.

However, depending on your financial history, you may not qualify for a personal loan, or your interest rates may be equal to or higher than your credit cards. You might also have to pay an origination fee, which will pile on more debt.

How Will Consolidating Debt Affect Your Credit Score?

Most debt consolidation tools require you to have a good credit score. Even if you’re able to get a loan without a good score, your credit score will be negatively affected if you aren’t able to make payments on time. 

How Long Will It Take to Get Out of Debt?

Even though consolidating debt simplifies your loan repayment process, it may actually take you longer to get out of debt. Depending on the option you choose, you may have to pay more in interest, which means you’ll spend longer making those single payments than you would be making payments to each individual credit card account.

Alternative Options

Looking for an alternative to debt consolidation? CreditAnswers may be the right option for you. We help you become debt-free in less time by offering debt relief services to meet your needs. You’ll only pay a fraction of what you owe and could be debt-free in just 24-36 months. Contact us today to get in touch with our debt resolution experts and get a free debt assessment.

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