Three Smart Ways to Consolidate Credit Card Debt and Boost Your Finances

National nonprofit credit counseling agency Take Charge America offers tailored debt consolidation solutions for varying financial situations

Managing credit card debt has become increasingly challenging for many Americans. The Federal Reserve Bank of New York reports total credit card debt in the United States has surged to a record-breaking $1.13 trillion. At the same time, delinquency rates are rising, particularly among millennials ages 30-39, many of whom are also grappling with student loan debt.

“Rising interest rates and stubborn inflation have made it even harder to pay off credit cards, but there are effective solutions for managing debt,” said Amy Robbins, associate director of operations with Take Charge America, a nonprofit credit counseling and debt management agency. “Debt consolidation can be a game-changer for juggling multiple debts and paying off balances in a smart, strategic way.”

Robbins highlights three effective debt consolidation methods to pave the way to financial stability:

• Consider credit card balance transfers for lower rates: Moving credit card debt to a new card with a lower interest rate can significantly reduce the amount of interest you pay. Many cards offer a 0% APR for a predetermined amount of time, enabling you to pay down more of the principal and accelerating your debt repayment. Balance transfers also allow you to consolidate multiple credit card balances into a single payment, simplifying your finances and making it easier to manage your debt. Yet before proceeding, it's important to consider any associated costs, including fees and variable interest rates when the promotional period ends.
• Leverage home equity consolidation strategies: For homeowners with significant equity, a home equity loan is another option for consolidating various debts into a single, manageable loan with a lower interest rate. This type of loan can lead to considerable savings on interest payments, but it’s crucial to secure a favorable rate and read the fine print, given your home serves as collateral.
• Simplify payments with debt management plans: Debt management programs offer a streamlined approach to consolidating multiple debts. Under this arrangement, an agency like Take Charge America works to consolidate your debts into one convenient monthly payment. Credit counselors also negotiate concessions on your behalf and manage the debt payment distributions to creditors, removing the burden of managing multiple debts and ensuring expert oversight of your repayment strategy. Learn more about debt management plans.

For additional financial resources and debt payoff strategies, visit Take Charge America’s Budget Tools.

About Take Charge America, Inc.

Founded in 1987, Take Charge America, Inc. is a nonprofit agency offering financial education and counseling services including credit counseling, debt management, housing counseling and bankruptcy counseling. It has helped more than 2 million consumers nationwide manage their personal finances and debts. To learn more, visit takechargeamerica.org or call (888) 822-9193.

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