 TITLE: How to Consolidate Your Credit Card Debt CONTENT: How Debt Consolidation Works\n----------------------------\nDebt consolidation occurs when you use a new loan or credit card to pay off existing debt. While the term \"consolidate\" implies merging multiple credit accounts into one, you can also consolidate a balance from just one credit card.\nConsolidating debt works best when you can score a lower interest rate on the new loan or credit card than what you're currently paying. With a lower rate, you can save money and potentially pay off your debt faster.\nIf you have multiple debt accounts you want to consolidate, the process can also simplify repayment by giving you just one monthly payment to keep track of. Also, if you have credit cards, which don't have set repayment terms, a personal loan's set repayment time frame could give you the structure you need to stick with the payoff plan.\nFor example, let's say you have a credit card with a $7,000 balance and a 20% annual percentage rate (APR). If you were to set a goal to pay off the debt over three years, you'd have a monthly payment of roughly $260, and you'd pay $2,365 in interest over that time.\nBut if you were to apply for a three-year personal loan with a 12% interest rate, your monthly payment would be $233, and you'd pay only $1,370 in interest—saving you $995.\nHowever, debt consolidation isn't for everyone, so it's important to consider your situation and options before you apply for a new credit card or consolidation loan. END