Consolidating credit card debt into one loan
We are the Consumer Financial Protection Bureau (CFPB), a U. government agency that makes sure banks, lenders, and other financial companies treat you fairly. Consolidation means that your various debts, whether they are credit card bills or loan payments, are rolled into one monthly payment.
If you have multiple credit card accounts or loans, consolidation may be a way to simplify or lower payments.
For a credit card consolidation loan to be worth your while, you’ll want a plan that offers a lower interest rate and/or lower monthly payments than you’re currently paying to your creditors.
The option that best suits you depends on your overall debt load, credit score and history, available cash and other aspects of your financial situation, as well as your self-discipline.
Consolidation works best when your ultimate goal is to become debt-free.
Make a budget to pay off your debt by the end of the introductory period, because any remaining balance after that time will be subject to a regular credit card interest rate.
Most issuers charge a balance transfer fee of around 3%, and some also charge an annual fee.