How to Consolidate Credit Card Debt


Perhaps one of the best ways to efficiently and effectively consolidate credit card debt is via a balance transfer.

You’ve probably received balance transfer offers from your credit card issuers in the mail, and if you don’t know what a balance transfer is, check the link below for an in-depth explanation.

[What is a balance transfer?]

Credit card balance transfers were essentially created with debt consolidation in mind, so what better way to corral and tackle your debt than a balance transfer?

Let’s look at an example to illustrate the savings:

Credit card A: $3,000 @21.99% APR
Credit card B: $2,000 @24.99% APR
Balance transfer offer: 0% APR for 18 months from Discover.

Assuming you’ve got $5,000 in total credit card debt at outrageous (but all too often common) interest rates, you’d be bleeding money every month just in credit card finance charges.

In our scenario, you’d be paying roughly $97 a month just to cover the interest. That’s nearly $100 down the tubes for no good reason. Why would you subject yourself to that?

Especially if there’s an easy solution…enter the 0% APR balance transfer offer.

If you moved that $5,000 in credit card debt to a new Discover credit card that offered 0% APR for a full 18 months, you’d consolidate your debt and shield it from interest for a year and a half.

This particular offer would have a 3% balance transfer fee, which would amount to $150, but that beats paying over $1,000 annually in finance charges by keeping it with your current credit card issuers.

You’d wind up with one balance of $5,150 and each payment you made the first 18 billing cycles would go toward that balance, instead of interest.

If you paid around $286 per month the debt would be down to zero in 18 months. Not so if you left your debt with the original credit card issuers.

Additionally, you’d also have all your credit card debt in one place, making it convenient to pay off with one single payment and easy to track.

If your debt is scattered among a slew of different credit cards, it can be difficult to get out of the debt spiral. And you definitely don’t want to miss a payment…that would be disastrous for your credit score!

Balance Transfers Are Simple and Straightforward

So there it is – balance transfers are the best way to consolidate and pay off credit card debt. Sure, you can go with a pure “debt consolidation” company, but those are typically riddled with fees and may have a negative impact on your credit if they make odd deals with your creditors.

Anyway, that type of stuff is reserved for people in serious financial distress. If you simply have credit card debt subject to the typical high interest rates offered, a balance transfer is likely the way to go for the benefits mentioned.

At the end of the day, a balance transfer is a more straightforward and dare I say “legit” method of consolidation, without the stigma of being considered “debt consolidation,” if that makes sense.

They’re also simple to execute, and will only require you to fill out a simple credit card application, while providing basic information about the accounts you want to pay off.

Read more: Does a balance transfer count as a payment?


  1. This truly is the best way to consolidate/pay off all your credit cards, but you do need good credit to pull it off something not everyone has in this situation.

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