Consolidate Credit Card Debt and Save Money

Want to reduce your debt as you're paying for it? Money Girl has the trick to getting out of debt quickly, and for less! 

Laura Adams, MBA
2-minute read

A podcast listener named Jenna asks:

"I’m paying high interest rates on balances that I owe on 2 credit cards. I plan to pay them off as soon as I can, but it may take some time. What are my options for consolidating them so I can pay less interest and save money in the meantime?"


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If you can’t pay off your credit card debt, the next best option is to “optimize” it—or shift it to a lower-interest account. That doesn’t make your debt disappear, but it can save you a bundle in interest. Then you can use the savings to pay down your debt even faster.

Consider these 3 options:

Option #1: Use a Balance Transfer Credit Card

When you transfer an existing loan or credit card balance to a new card with a lower interest rate, you can save a lot of money.

The Discover® More Card gives you 0% APR for 15 months on balance transfers and new purchases. After that you’re offered a rate from 10.99% to 20.99% based on your credit rating. There is a 3% balance transfer fee—so do the math to make sure it’s worthwhile.

For instance, if you have a $3,000 of debt on a credit card that charges 26%, you’re paying $780 in annual interest. If you pay the balance transfer fee of 3% or $90 on the Discover® More Card, you’d save $690 ($780 - $90) in just the first 12 months. 

Option #2: Get a Personal Loan

You can use a personal loan to pay off your credit cards and consolidate the debt into one lower-interest loan payment. Many local banks and credit unions offer affordable loans, even if you don’t have excellent credit.

Option #3: Get a Peer-to-Peer Loan

Peer-to-peer or social lending started in 2006 and is growing in popularity for both borrowers and investors. It’s an online platform where you can get an unsecured personal loan through a network of lenders for debt consolidation or any other purpose.

Check out sites like Lending Club or Prosper—where you can borrow for as little as 6.59% and earn an average of 10.59% APR. 

Erase Debt photo courtesy of Shutterstock




About the Author

Laura Adams, MBA

Laura Adams received an MBA from the University of Florida. She's an award-winning personal finance author, speaker, and consumer advocate who is a frequent, trusted source for the national media. Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers is her newest title. Laura's previous book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love, was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show.