Credit card consolidation: The best way to pay off credit cards

Are you feeling weighed down by massive credit card bills? Are you getting collection calls from creditors every day? If so, then this is the best time to consolidate multiple debts.

How does credit card debt consolidation help you?

  • Lowers interest rates and makes monthly payments affordable
  • Replaces multiple credit card debts with a single monthly payment plan
  • Helps you get rid of credit card late payment fees and other penalties
  • Helps you keep track of your debt progress and get financial success
  • Helps you avoid bankruptcy and protect credit score

What can you do before consolidating your credit card debts?

1 Call 800-DEBT-913

Explain your credit card debt problems in the FREE no-obligation counseling session to an experienced financial counselor. Keep all your credit card bills in your hand before making the call.

2 Admit how much you can pay

Give a rough idea to the counselor on how much you owe on your multiple credit cards and how much you can pay every month. You can use an online credit card payment calculator for calculating all the figures.

3 Get credit card debt advice

The financial counselor will tell you the credit card debt consolidation process in detail online or over phone. He will tell you how much you have to pay to be debt free.

How does credit card consolidation help you repay debts?

With the help of credit consolidation, you can restructure your debt repayment plan. Through this, you can consolidate your multiple credit card bills into a single payment every month. Thus, you need to manage only one payment instead of handling several creditors.

However, the amount you need to pay every month will depend on the following:

Current interest rates on your debts

Your total outstanding balance

The amount of your monthly income

Your creditors

How much
debt consolidation
can save you

How will you know that credit card consolidation is suitable for you?

Check out these factors before you opt for this credit card debt eliminate option:

Interest rates
Check the new interest rate you have to pay after consolidating credit cards. If the interest rate is lower than what you’re currently paying, then this debt relief option is good for you.
Repayment term
This is the best option to pay off the credit card when the repayment term is not too long. You’ll pay more eventually if the repayment term is too long.
Regular income
Go for this option if you have a steady flow of income since you need to make monthly payments to the credit card consolidation company

How does credit card debt consolidation affect your credit report?

Usually, there is a positive effect on your credit report when you consolidate credit card balances since you pay back your debts in full. So, you’re not only getting financial freedom by consolidating credit card debt but also improving your credit score gradually.

What are the differences between credit card consolidation and settlement?

Credit card debt settlement is also a suitable option to get rid of debts. However, there are some differences between consolidation and settlement, which are given below.

Characteristics Credit card consolidation Credit card settlement
1. Reduction in principal amount
2. Reduction in interest rate
3. Lump sum payment
4. Single monthly payment
5. Free counseling
6. Trust account is created
7. Effect on the credit report - "Paid in Full"*
8. Effect on the credit report - "Paid as Agreed"**

* Paid in Full - It means that the debtor has paid the outstanding balance in that account in full.

** Paid as Agreed - It means that the debtor has paid the amount requested to satisfy the account.

What are some other credit card debt solutions?

Credit card debt settlement

Here you settle your credit card balances by paying less than what you owe. You can pay the agreed amount up front or in lump sum and be debt free.

Credit card debt management

Here a credit counselor will review your finances, offer a budget plan and then negotiate with your creditors to cut down credit card interest rates.


This is a legal solution to your credit card debt problems. Here, the court decides a payment plan that you need to follow to pay back your creditors.

Is there only one way to consolidate credit card bills?

No. There are 3 ways to consolidate your multiple credit card bills. They are:

  1. Credit card consolidation programs: This is the best way to consolidate credit card debt since you don’t have to worry about anything. The credit card consolidation company would negotiate with creditors, bring down interest rates, and deal with the collection calls.
  2. Do it yourself credit consolidation: Here, you negotiate and convince creditors for a lower monthly payment. You can also transfer balance from a credit card with high-interest rate to one with low-interest rate (known as credit card balance transfer) so that you have to pay less every month.
  3. Credit card debt consolidation loan: This is a risky option since you use an unsecured or secured debt consolidation loan to consolidate your credit cards. You use the money to pay off your credit card debts and then make a monthly payment to repay the personal loan.

Last Updated on: Tue, 3 Jul 2018