Struggling with multiple credit card payments? Consolidation and balance transfers are two different paths to the same goal: lower interest and faster payoff.
What Is Credit Card Consolidation?
Consolidation combines multiple debts (credit cards, loans) into one new loan. You get one payment, one interest rate, one due date.
Pros:
- Simpler: One payment instead of five
- Often lower interest rate
- Predictable payoff date
Cons:
- May extend repayment timeline
- Origination fees (typically 1-5%)
- Hard inquiry hits your credit score
What Is a Balance Transfer?
A balance transfer moves your credit card debt to a new card with a lower (often 0%) introductory rate for 6-21 months. You still have the same cards but one has a temporary reprieve from interest.
Pros:
- Temporary 0% APR window
- Lower balance transfer fees than origination fees
- Keep original accounts open
Cons:
- Rate jumps up after intro period (typically 18-24%)
- Requires good credit (typically 670+)
- Doesn't address spending habits
Which Should You Choose?
- Choose Consolidation if: You want one payment, have multiple debt types, or have fair credit
- Choose Balance Transfer if: You have good credit and can aggressively pay during 0% window