Credit Debt Consolidation


ADVERTISING DISCLOSURE: is an independent, advertising-supported web site. receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Research » Guides » Building Credit History » Credit Debt Consolidation

Credit Debt Consolidation

Updated: May 28, 2019

The content is accurate at the time of publication and is subject to change.

The average US credit card debt is mounting and it is becoming ever much harder to manage it. The number of consumers accustomed to using their cards purely for the sake of rewards and paying their balances off each month is still relatively small. The major part of US cardholders is still dependent on their credit cards in their everyday life. It's easy to guess that regularly pulling out your plastic to pay for a morning cup of coffee, let alone other things you need every day, is very likely to pile you under a heap of unpaid bills sooner or later.

However, while debt has become a common thing for the US credit cad industry, it should by no means be something desirable for an American household.

Analysis of the market shows that the number of people looking for credit card debt consolidation leaves behind those running after beneficial rewards credit cards. It is no wonder that with the increased risk of consumers' defaults, low interest credit cards and rewards cards are today much harder to qualify for.

If you are among those, whose credit is being damaged by unmanageable debt, making you forget dreaming about all the good credit cards that you would probably be approved for, then start thinking of radical debt repayment plan.

There are two most effective methods of killing debt fast and at a relatively low cost. These are debt consolidation personal loans and balance transfer credit cards. While these methods can really bring positive results to your credit card debt repayment campaign, you should watch out for serious pitfalls that may ruin the rest of your credit rating.

Let's start with the debt consolidation loan which is a personal loan combining all your existing debts, including medical bills, into a single line of credit with a lower interest rate. Today there are still many consumers who opt to take out a home equity line of credit as a secured type of a debt consolidation loan.

Traditionally, as home is considered to be a customer's biggest and most valuable asset, the home equity has usually been used for major items such as education or medical bills. But as the average credit card debt is reaching unprecedented scale, for many it seems to be the only way out.

Being a type of revolving credit where your home serves as collateral, it poses great risks if not managed correctly. If you fail to repay, it could mean the loss of your home.

So, home equity line of credit, though being effective and rather easy to qualify for, is a very risky venture. What's more, the devaluation in the mortgage market and the credit card crisis make it times more difficult to qualify for this type of debt consolidation loan. So, if it still is your only variant, do all the inquiries necessary to stay on the safe side.

If you do not want to take on such a risk, it's high time to do a balance transfer. The lower interest rate on your new credit card may dramatically reduce your monthly payments and leave some spare cash to pay for other loans or credit cards. With the help of a 0% APR balance transfer cards you can repay your debt without any interest at all.

The only risk that you will have with a balance transfer is making a new debt if you start making purchases on it and skipping payments. A balance transfer cards is most effective for the pure purpose of reducing your balances but not using it for every day needs.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Related Research:

Citi Premier® Card – A World Elite Mastercard Travel Credit Card

Citi Premier® Card – A World Elite Mastercard Travel Credit Card

Posted: February 10, 2021

Citi, a advertising partner, offers the Citi Premier® Card, which gives elevated ThankYou points for your travel expenses and, with the recent update of the rewards program, for purchases at restaurants, supermarkets, and… Continue reading

Discover it® Miles Review: Turn Miles Into Travel Experiences or Cash

Discover it® Miles Review: Turn Miles Into Travel Experiences or Cash

Posted: February 10, 2021

Many travel credit cards come with tempting perks, requiring some effort bonuses, a complicated rewards structure, and steep annual fees. The Discover it® Miles is probably the best Discover card for travel, especially if you do not travel… Continue reading

Top 5 Secured Credit Cards: October 2021 – Experts’ Choice

Top 5 Secured Credit Cards: October 2021 – Experts’ Choice

Posted: October 22, 2020

The COVID-19 pandemic has made significant changes not only in people’s lives and their financial standing but also in the entire financial sector of the U.S. We have collected the best secured card offers from our partners so that you can… Continue reading

You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!