Credit card debt is the most common reason homeowners consolidate. Card rates are high, minimum payments barely move the balance, and juggling several cards is stressful.
Why cards are expensive
Most credit cards charge interest rates many times higher than a mortgage. When you only make minimum payments, most of each payment goes to interest. See the math.
How consolidation helps
Paying the cards off with a lower-rate mortgage means more of your monthly payment goes toward what you actually owe, as long as you keep paying aggressively. See paying it off faster.
Before you consolidate
- List every card: balance, rate, minimum payment.
- Figure out why the balances grew, and fix that first.
- Decide what happens to each card afterward. See your paid-off cards.
After you consolidate
- Don’t carry a balance again; pay in full each month
- Keep one card for emergencies, with a low limit
- Build an emergency fund. See emergency funds.
Your credit
Paying balances to zero usually helps your credit score over time. See consolidation and your credit score.
This article is general information, not financial or legal advice. Lender requirements, rates and fees change and depend on your situation.