Consolidating debt is a practical way to reduce an accumulation of monthly payments. If multiple credit card balances have reached the point that reducing the debt seems impossible, consider combining the balances in one loan or onto one credit card. The single payment is likely to be more manageable than multiple payments and allow the consumer to gain better control of the use of credit.
Transfer balances
One of the more popular ways to consolidate credit card debt is to transfer the unpaid balances to a new card or to one with a lower rate of interest. Some card companies offer 0% interest rates on new cards or low introductory rates for new customers. The rate of interest will vary depending on how much debt is transferred and what kind of credit rating the customer has earned. Some negotiation with the lender may be required.
Secure a personal loan
Acquiring personal loan from a bank or other lending institution is an option many consumers choose when consolidating credit card debt. Some banks, especially if the costumer's relationship with the bank is long-standing, will offer special loan rates for funds intended to pay off credit cards. This kind of loan will require a reasonably good credit score and may require that the bank transfer funds to the credit card companies directly.
Take out a home equity loan
A home equity loan from a bank or other lender is based on the worth of the customer's home compared to the amount of mortgage still owed on that home. In order to apply for this kind of loan, the customer must have established some equity and have a good credit score. A home equity loan may have a lower interest rate than a personal loan.
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