Pros and cons of consolidating credit card debt

by | Aug 9, 2022

Credit cards are a fast and easy way to pay for your purchases. But when everything is just a swipe away, small charges can quickly turn into a big problem. And if the bills become too overwhelming to bear, you may want to consider consolidating. If you’re thinking about consolidating your credit card debt, read on to learn some pros and cons to consider.

What is a debt consolidation?

A debt consolidation occurs when a consumer takes out a loan, such as a personal loan, to pay off other forms of debt all at once. If done responsibly, a debt consolidation may help you lower your monthly payment and ease the stress of multiple burdensome bills. Now that we know what a debt consolidation is, let’s take a closer look at the pros and cons.

Debt consolidation pros

Combining multiple card debts into a single consolidation loan will likely make your financial life more simple. You’ll only have a single repayment to make, so it will be easier to budget with less chance of being hit with late payment charges. Here are some more pros to think about.

Lower Monthly Payments

Depending on your personal qualifications and new loan terms, a debt consolidation may help you lower payments with either a longer repayment period and/or a lower interest rate. If you’re struggling under the pressure of high debt, a consolidation can help provide a safety valve.

Faster debt clearance

If you have excessive unpaid credit card debt, the majority of each monthly payment may be taken up by interest charges. This leaves most of the debt untouched. With a consolidation loan, the payments can make a much greater impact on the principal you owe, and potentially clear your debt more quickly.

Improve your credit score

Reducing the amount of debt you carry can also have a positive impact on your credit score. With lower balances, you’ll be using less of your available credit. As a result, your credit utilization rate could go down and may help you improve your scores.

If you’re aiming to better your overall credit health, an effective consolidation combined with online credit management tools, such as those found in ScoreShuttle, could help you achieve your goals.

Debt consolidation cons

Alternatively, while the potential benefits of consolidation are powerful, there are some downsides to consider.

Potential increase in overall cost

If your new loan ends up having a longer term, or higher interest, you may wind up paying more in charges overall, even if the monthly payments themselves are lower. This con will vary and may not even apply if you qualify for a lower interest rate than what your current debt carries and/or if you pay the loan off relatively quickly.

Secured vs. unsecured

If you use a secured loan to consolidate your credit card debt, you’ll be converting unsecured debt into one which could potentially risk your property. Credit card debt is stressful, but having the risk of your possessions potentially taken away is a serious thing to think about.

You’ll still owe the debt

Although consolidating debt can give relief from financial pressure, it doesn’t change the underlying situation. You’ll still owe the money. However, as we mentioned above, depending on your loan terms, you may have longer to pay off the debt, which could help you lower your monthly payment. Additionally, if you qualify for a lower interest rate, you could also save some cash – at least from a fee perspective.

Temptations of a clean slate

Perhaps the biggest drawback of consolidation is the sense of being given a fresh financial start. Without the weight of a high credit card balance hanging on your shoulders, it’s easy to fall into the trap of resuming spending and racking up new card debt to replace the ones you’ve consolidated. So if you don’t have the discipline to hold off on excessive new purchases, you could find yourself with even worse debt problems than before.


If your personal pros outweigh the cons, consolidating your credit card debt can be a powerful way of simplifying your financial situation. If you’re considering consolidating your credit card debt, ScoreShuttle allows to you shop and compare loan offers for free online! To find out which offers could be available to you, click below to get started.

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Disclaimer: The information above is general in nature and is not a comprehensive list of all pros and cons, or repayment, consolidation, or debt assistance options that may be available to you. Anytime you change or consolidate payments, additional term lengths and/or interest may be applied. Always be sure to check with your personal financial advisor to determine if a credit card consolidation is best for you.

ScoreShuttle provides its users access to a suite of financial products and services from third-party partners. ScoreShuttle may receive a fee for referrals who sign up for any products or services listed on our website. This compensation may influence the selection, appearance, and order of appearance of the offers listed, and offers do not include all financial services, companies, or all of their available product and service offerings.

ScoreShuttle is not affiliated with, nor does it guarantee personal loans of any kind. Rates and other terms are estimates provided by third-party partners based on the information you have provided ScoreShuttle; they are not guarantees and do not bind any lender. Always be sure to do your own research to see which financial products and services are a good fit for you and your unique situation. The information above is accurate as of 08.02.22 and is subject to change. For additional disclaimers, click here.

Liz Richards

Liz Richards

Credit Content Specialist

Liz Richards is a content creator specializing in credit wellness and best budgeting practices. As an in-house ScoreShuttle contributor, Liz transforms complex financial topics into easy-to-digest tips that consumers can use to manage their credit and financial worthiness.

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