QandAs: Loans

Can I consolidate my debt on a credit card?

Answer:
Sounds like a great idea doesn't it. Another

credit card to potentially hurt your credit score but is it a viable option to consolidate your debt load? Debt consolidation can take it's form any many ways. It's the process of taking all your separate sources of debt and combining them into a lower interest rate vehicle.

The short answer of whether or not you should consider consolidating your debt on a credit card is no. Credit cards usually have high interest rates. There are loan vehicles that offer lower interest rates than a credit card. The best option for consolidating your debt is to take out a Home Equity Loan or Home Equity Line of Credit. These loans are as good as cash so you receive the loans, pay off your debts and now you have a single debt source that is usually built on a lower interest rate than a credit card. So if you own your home, take out a Home Equity Loan or Home Equity Line of Credit.

So you don't own a home, is it better to consolidate your debt on a credit card? I still have to say no. I don't care how great of a deal your credit card deal is the interest rates are still going to be more than a loan. Try a personal loan.

Personal loans are going to have lower interest rates then your credit card. They generally have higher interest rates then a Home Equity Loan because they are less risky than a personal loan. Personal loans are usually based on the amount you are looking to borrow and your credit score. If you are looking to borrow a small amount like $5-$20,000 and you have a decent credit score then you should be able to find a personal loan with a good interest rate.

Before you go out and pay off all your debt with a high interest credit card try a debt consolidation program that utilizes a home or personal loan. For the best debt consolidation rates check here .