woman online banking on laptop
LightFieldStudios/Getty Images

If you have a lot of credit card debt, you may be able to consolidate your outstanding balances into a single, lower-interest loan to pay down your debt in less time. Credit card consolidation means that your debt across multiple credit cards is merged, giving you one monthly payment.

If you’re wondering how to consolidate credit card debt, you may want to consider a balance transfer credit card, a personal loan or a home equity loan. See which solution is right for you:

Option 1: Consolidate credit card debt with a balance transfer credit card

Using a balance transfer credit card is one of the most common ways to consolidate credit card debt. This method requires you to open up a new credit card and move all of your existing credit card balances onto the new card. The new account might come with a lower interest rate, such as a promotional period with zero percent interest for up to 21 months.

Your new credit card will have a credit limit that will determine how much debt you can transfer to it. Your credit limit will depend on your credit score and income.

Since the amount you can transfer is capped by your credit limit, balance transfer cards are ideal if you have a smaller amount of debt.

Before you apply for a balance transfer card, find out what the new card’s annual percentage rate (APR) will be once the promotional rate ends. Also, keep in mind that most balance transfer credit cards charge a fee for transferring a balance from another credit card.

Option 2: Consolidate credit card debt with a personal loan

If your debt is over $15,000, you can consolidate credit cards by taking out a personal loan from a bank or other financial institution. Instead of paying off multiple cards with high interest rates, you’ll pay back a single loan with a lower interest rate than your current cards.

Just like credit cards, personal loans are typically given out based on your credit history and score. Personal loans often provide a higher credit line than you might get with a credit card— sometimes up to $35,000.

Before you move forward with credit card debt consolidation using a personal loan, keep in mind that some personal loans come with a prepayment fee, or a charge for repaying the loan ahead of schedule.

Option 3: Consolidate credit card debt with a home equity loan

If you’re a homeowner, you may be able to use a home equity loan for debt consolidation. With this type of loan, you can borrow money based on how much equity you have in your home, and use that money to pay off your debt.

Home equity loans can offer lower interest rates than personal loans or balance transfer cards, but be careful — a home equity loan uses your home as collateral. If you fall behind in payments, you could be at risk of losing your house.

Home equity loans can also come with hefty fees, including home appraisal fees, annual fees, origination fees and more. Calculate the true cost of a home equity loan—including fees and risk—when deciding if this option is right for you.

Changing Rates Icon showing rates changing over time.

Find a balance transfer card that's right for you.