Americans are carrying more credit card debt than ever, and the interest on it is punishing.
The average card APR has been parked above 20% for months, which means a $6,000 balance can quietly cost you over $100 a month in interest alone.
That math is pushing a lot of households to look at debt consolidation loans again.
A consolidation loan works like this: you borrow one lump sum, pay off the cards, and then make a single fixed payment each month.
Instead of five due dates and five different rates, you get one.
The pitch is simplicity, and for people with decent credit, the rate can land well below what the cards are charging.
But the loan only pays off if the cards stay at zero.
Roughly half of borrowers who consolidate end up running the balances back up within a couple of years, according to consumer research.
Then you're stuck with the old debt and a new loan payment.
The rates you'll actually see depend heavily on your credit score.
Borrowers with scores above 720 might find personal loans in the 8% to 12% range.
Drop below 650, and you could be looking at 20% or more, which defeats the whole purpose.
Always check the APR you're offered before signing anything.
Some lenders charge origination fees of 1% to 8%, baked right into the loan.
A $10,000 loan with a 5% fee means you only get $9,500 to pay down debt but owe the full $10,000.
Ask for the total cost over the life of the loan, not just the monthly payment.
If your credit is rough, a nonprofit credit counseling agency may be a better first call.
They can negotiate lower rates with card issuers directly, often for a small monthly fee.
It's slower, but it can beat a high-rate loan.
Just avoid any outfit that demands big upfront payments before doing anything.
Also be wary of debt settlement companies promising to make your balances vanish.
They often tell you to stop paying your cards and stash money in a savings account, which tanks your credit and can trigger lawsuits from collectors.
Legitimate help doesn't start with "stop paying your bills." One more move worth trying first: call your card issuer and ask for a lower APR.
It sounds old-fashioned, but a short script about a competing offer still works more often than people expect.
Even a few points shaved off can save real money while you sort out a bigger plan.
The bottom line: consolidation can be a genuinely useful tool, but it's a strategy, not a rescue.
Do the math on the total cost, fix the spending that built the balance, and keep the cards dormant.
Final Thoughts
Otherwise you're just moving the problem to a new address with a nicer interest rate.