Consolidate by Using Your Credit Cards

If you can't qualify for a debt consolidation loan at a reasonable interest rate, you could try to consolidate all of your credit card balances onto one low interest rate card and then aggressively pay off this card by paying a set amount each month that you determine in advance. For example, the minimum payment on the card may be $50, but if you choose to pay $500 every month, you will have the balance paid off in a reasonable amount of time.

From time to time credit card companies offer very low promotional interest rates. Some people use these as an opportunity to consolidate their debts. This may work for a while, but the reason why credit card companies offer these promotional rates is because most people don't pay off their balances in a timely fashion and end up getting stuck at a higher interest rate when the promotional interest rate expires.

Many credit card companies also offer low interest rate credit cards. However, many times people who desperately want them don't qualify because their credit score is not high enough or they have too much debt. If this is your situation, there are other options below that may work for you.

Advantages of Consolidating with Credit Cards

  1. Low interest cards are available along with low promotional interest rates
  2. Having all your debt in one place can make it easier for you to keep track of what you owe and start paying it down
  3. Payment flexibility. You can pay much more than your minimum payment each month, but if an emergency arises you can temporarily fall back to the required minimum payment

Disadvantages of Consolidating with Credit Cards

  1. Many people who need a consolidation loan don't qualify for low rate cards
  2. Promotional interest rates usually only last for a number of months
  3. Once a promotional rate ends, normal interest rates are typically very high
  4. If you don't create a budget, spend less than you earn, and discipline yourself to pay more than your minimum payment each month, you may take decades to pay off your debt using a credit card

Find out more about what you can do about your debts by speaking with one of our Credit Counsellors. 

Canada's Other Debt Consolidation Options:

  1. Consolidate using a Debt Consolidation Loan
  2. Consolidate using a Home Equity Loan / Refinance Mortgage / Second Mortgage
  3. Consolidate using a Line of Credit or Overdraft
  4. Consolidate debt on your Credit Cards
  5. Consolidate using a Debt Management Program
  6. Consolidate by doing a Debt Settlement
  7. File a Consumer Proposal
  8. Consolidate by Borrowing from Family or Friends

How to Get Good Debt Consolidation Advice for Free