Debt Payoff

5 Realistic Ways to Consolidate Credit Card Debt

Consolidate Credit Card Debt
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If you can find a way to consolidate your credit card debt to a lower interest rate, you’ll make it easier to manage your bills and save money.

The aim of the game here is to combine your debts and reduce interest payments. Then, and most importantly, work as hard as possible to pay off that debt.

It takes work to get clear of debt, but these five consolidation options will help you get started.

1. Deal With Earnings and Expenses

How it works: Before you start shifting debt around, go all-out to reduce your spending and increase your earnings. There are two reasons to do this.

One is to improve your debt-to-income ratio, so that you look like a good bet to potential lenders. That will make it easier to consolidate everything into a new, lower-interest loan.

Plus, if you have bad credit because you’ve failed to make your debt payments on time in the past, you may need to take care of some past-due bills or charged-off debt before you’ll qualify for credit card debt consolidation.

The other reason is to get into good habits. Debt consolidation isn’t a magic bullet. It will help you manage your finances, but for a long-term fix you’ll need to address the underlying behaviors that caused the debt in the first place.

So, start shopping at discount stores like Aldi, which offer quality groceries at lower prices than other options. Switch to free internet if it’s available in your area. Look for a weekend job or something in the gig economy as an extra earner. You might even consider turning your hobby into a money-making enterprise.

You won’t need to pinch pennies or work this hard forever, but you will need to keep it up for now in order to get back on the right track.


  • Builds good habits.
  • Allows you to pay off some of your debt before you consolidate.


  • Time consuming.
  • Missing out on luxuries.

2. Take Out a Low-Interest Loan

How it works: Once you’ve improved your debt-to-earnings ratio, it’s time to find a better loan. One good option is a personal loan, which often comes with a low interest rate and borrower-friendly terms.

If a personal loan is out of the question, check out a marketplace such as Credible, where you can enter your newly-improved details and find loan offers from various online lenders.

Look at their interest rates, repayment terms (including payment schedule and origination fees), and how much money you can borrow. Then, pick the best lender for your particular circumstances.

If you’re able to find a lender with a lower interest rate than your current credit cards that will lend you enough to pay them all off, you’ll save substantially over the lifetime of your loan. Plus, you’ll benefit from the convenience of only having to make a single monthly payment. (And you can repeat this step to save even more money, as I’ll discuss below in the section on balance transfers).


  • Makes it easier to manage your debts.
  • Reduces the amount of interest you’ll pay (sometimes substantially).


  • Your eligibility and how much you’ll benefit both depend on your FICO credit score and debt-to-income ratio.

Click here to check rates with Credible.

3. Manage Your Credit Cards with Tally

How it works: Maybe the easiest way to consolidate  credit card debt is through Tally, an app designed to help you save money and pay down your debt as fast as possible.

To get started with Tally, you just download the app and add your credit card details. Tally will then analyze your financial history and decide whether to offer you a line of credit, which you can use to pay down (or pay off) your high-interest balances.

You’ll need a minimum credit score of 660 to qualify for a debt consolidation loan with Tally, so you might not qualify if you’ve missed payments in the past or have recently charged-off debt.

On the other hand, if you have at least fairly good credit, you stand to save thousands of dollars with almost no work. Also, since Tally’s interest ranges from 8% to 26%, applicants with the best credit will see lower rates and thus the most benefit.

If you’re interested in learning more, I dive into the specifics of the service in my in-depth review.


  • Shaving even a couple of percentage points off your interest rate can save you thousands of dollars. But if you have very good or excellent credit, your savings can be huge.
  • Tally is also a debt management app: if you still have balances after using your line of credit, Tally will make those payments on your behalf. Then you’ll just issue one lump-sum payment to Tally.


  • Your eligibility and interest rate are largely dependent upon your credit score. If you have a low credit score, you may not qualify at all.
  • There’s no competition between lenders — the rate Tally offers you is the only option you have.
  • Depending on how much debt you have, Tally may not offer you a big enough loan to pay it all off. In some cases, this might increase your minimum monthly payments, as you’ll be paying back both Tally and whatever other credit card accounts you still have.

Click here to get started with Tally.

4. Use Balance Transfer Credit Cards

How it works: Some credit cards offer an initial period of very low interest — sometimes as low as 0% — as an incentive to sign up or switch from another company. This period typically lasts for six to 18 months.

For a fee (usually a small one), you can transfer debt from an existing card with a much higher interest rate; if you consolidate credit card debt onto a single 0% balance card, then you can significantly reduce the amount of interest you’ll pay over time (and get out of debt faster).

For this to work, the amount you’re saving on interest needs to be higher than what you’re paying in transfer fees. So, it’s worth doing the math before you jump in. An annual percentage rate (APR) of 0% instead of 15% is well worth a 3% balance transfer fee, but not all options are as clear cut.

Also, you need to make sure to pay your debt off before the introductory period runs out (or make another balance transfer) — otherwise you’ll be back to high fees again.

Learn More: Best Balance Transfer and 0% Apr Credit Cards Right Now


  • Using a balance transfer card can reduce your total interest payments.
  • Consolidating your debt can make it easier to manage.


  • Opening a new credit card has a short-term negative effect on your credit report (this effect goes away after a few months).
  • There is often a balance transfer fee.
  • If you don’t pay the debt off in time, the fees can rise sharply.

5. Talk to a Non-Profit Credit Counseling Agency

How it works: This is an option for when you’re at the very end of the rope. If job losses, medical bills or other dire circumstances have pushed your finances outside your control, there are people who can help.

A non-profit credit counseling agency is an organization that provides guidance and support in paying off debt and managing finances. Most exist to help people avoid bankruptcy and to provide them with financial education.

These services can give you extra advice, help you develop a detailed plan for your debt, and sometimes even act as an intermediary to negotiate better terms. This typically starts with a one-hour meeting with a credit counselor to discuss your situation.

But there is a downside. You need to be careful about the agencies you approach, as some are predatory organizations looking to profit off your debt. Only sign up with a non-profit agency, and make sure you know exactly what services they provide. Research their reputation and make sure you know what fees (if any) you’ll need to pay for their help. And be aware of how any debt management plan impacts your credit score.


  • Professional advice that puts your interests first.
  • Gives you a structured approach to managing debt.


  • The risk of predatory agencies.
  • Possible fees.

One option is to find help through, which has a network of non-profit debt counselors around the country.

Get started by completing the form below:


Getting Your Debt Under Control

There is no magic bullet that can make you debt-free and make all your financial problems vanish. But consolidating your credit card balances into a new loan can make them easier to manage, freeing you up to tackle the real work of earning more, spending less, and improving your overall financial situation.


R.J. Weiss
R.J. Weiss is the founder and editor of The Ways To Wealth, a Certified Financial Planner™, husband and father of three. He's spent the last 10+ years writing about personal finance and has been featured in Forbes, Bloomberg, MSN Money, and other publications.

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