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If you’re struggling with credit card debt, you definitely aren’t alone. The average American with credit card debt owes more than $16,000 to credit card companies with an average interest rate of 16%. Based on these averages, it would take a whopping 14 years for the typical household to pay off its credit card debt at a cost of more than $40,000.

No matter your situation, paying off your debt for good is possible. Credit card consolidation is a good solution that involves taking out a single type of debt on more favorable terms to pay off several credit card balances. There are several ways to consolidate your debt to give you a single monthly payment and one interest rate. Here are the best options to consider.

Balance Transfer Credit Card

If you have good to excellent credit, one solution may be getting a new credit card. Many credit cards are designed for paying off debt with a 0% interest promotional period of up to 21 months. During this period, your balance will not accrue any new interest, making it easier to pay down the balance. Depending on your level of debt and the length of the promotional period, it may be possible for you to pay off the debt completely without new interest charges to save hundreds or thousands.

If you choose this option, make sure you understand the terms. Most balance transfer credit cards charge a balance transfer fee of 3-4% of the balance you move. This means for every $10,000 you transfer, you will pay a fee of $300 to $400. You may also be limited to transferring a certain amount. Still, this may be better in the long-run when you consider the interest you will save.


If you own your home and have equity, a home equity line of credit (HELOC) may be a solution for consolidating the debt. This involves taking out a line of credit from a bank for up to 85% of your home’s equity — or the difference between what you owe and what your home is worth. HELOCs are revolving debt but it’s important to realize the debt becomes secured, unlike credit card debt. This means if you default on the HELOC, you risk losing your home. On the plus side, HELOCs can be tax-deductible with initially low interest rates.

Personal Consolidation Loan

A personal loan can be used to consolidate debt, but it’s usually only the best option if it works out to be cheaper and more effective than other solutions. Personal loans often have lower rates than credit cards, but not as low as HELOCs. You can get personal loans from many sources, including credit unions, banks, third party lenders, payday lenders, and peer-to-peer platforms.

Peer-to-peer platforms like Lending Club often make it easier to qualify for a loan compared to a bank, but the rates may be higher. Make sure you compare the interest rate and any origination fees to what you are paying now with your credit cards.

Debt Consolidation Company

A reputable debt consolidation company can also help you consolidate credit card debt, but be careful; there are many debt relief agencies that can trap you in debt with unnecessary fees for the service. Debt consolidation companies may promise to help you reduce your debt by negotiating with your creditors, in tern charging you a fee of anywhere from 30% to 70% of the balance.

If you choose to work with a debt relief company, make sure you watch for red flags:

  • The company tries to charge fees before debt is settled.
  • The company guarantees it can stop lawsuits and collections.
  • The company guarantees it can settle debts for substantially less than you owe.
  • The company tells you to stop contacting your creditors.

The Federal Trade Commission also offers warnings about debt relief companies.