How to Refinance Credit Card Debt (and Pay It Off Faster)

Word to the wise: the sooner you’re able to pay it off, the better.

refinance credit card debt fast
Updated June 11, 2024
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Credit card debt refinancing is a strategy used to reduce the total amount of interest you pay on your credit card balance. Using this strategy means transferring your balance from a credit card with a high annual percentage rate (APR) to a card, loan, or another option with a lower APR or interest rate.

Refinancing credit card debt can be a great tool for handling a growing credit card balance. You may have an easier time paying off your debt when you use it the right way. However, it may not be the right tool for every situation.

In this credit card debt refinancing guide

What is credit card debt refinancing?

When you refinance credit card debt, you simply pay off a credit card with a high APR using another credit card with a lower APR. You can also use an unsecured personal loan with a low interest rate or get help from a credit card debt service, among other options.

For example, you may have a credit card with a 26% APR. This high APR can increase the difficulty of paying off your credit card debt. Transfer your credit card debt to a credit card with a 16% APR or a loan with a 12% interest rate, and you may have an easier time paying off your debt.

That’s because the lower APR or interest rate puts more of your payments toward the principal amount you owe rather than the interest you are charged.

Keep in mind
You can opt for a personal loan, a home equity loan, or a debt relief service if paying off your credit card debt by opening another credit card worries you.

A balance transfer credit card could help you transfer existing credit card balances to a new card with a lower APR. Some credit cards even offer 0% intro APR for a limited time. This could allow you to save money on interest and pay off your debt faster.

Credit card Intro APR Balance transfer fee Annual fee
BankAmericard® credit card
BankAmericard® credit card
  • 0% intro APR for 18 billing cycles for any qualifying balance transfers made in the first 60 days (then 16.24% - 26.24% Variable APR)
  • 0% intro APR on purchases for 18 billing cycles (then 16.24% - 26.24% Variable APR)
3% for 60 days from account opening, then 4% $0
Wells Fargo Reflect® Card
Wells Fargo Reflect® Card
  • 0% intro APR for 21 months from account opening on qualifying balance transfers, then 18.24%, 24.74%, or 29.99% Variable APR
  • 0% intro APR on purchases for 21 months from account opening, then 18.24%, 24.74%, or 29.99% Variable APR
5%, min: $5 $0
Wells Fargo Active Cash® Card
Wells Fargo Active Cash® Card
  • 0% intro APR for 15 months from account opening on qualifying balance transfers, then 20.24%, 25.24%, or 29.99% Variable APR
  • 0% intro APR on purchases for 15 months from account opening, then 20.24%, 25.24%, or 29.99% Variable APR
3% for 120 days from account opening, then up to 5%; min: $5 $0
Capital One Quicksilver Cash Rewards Credit Card
Capital One Quicksilver Cash Rewards Credit Card
  • 0% intro APR for 15 months on balance transfers, then 19.99% - 29.99% (variable) APR
  • 0% intro APR for 15 months on purchases, then 19.99% - 29.99% (variable) APR
Balance transfer fee applies $0
Citi Double Cash® Card
Citi Double Cash® Card
  • 0% intro APR on balance transfers for 18 months, then 19.24% - 29.24% (Variable)
3% of each balance transfer ($5 minimum) within 4 months of account opening; then 5% of each transfer ($5 minimum) after the 4 month intro period ends $0

One of the methods to restructure your credit card debt is by getting help from specialized credit card debt services. These services typically offer relief in the form of debt consolidation or settlement. Here are our recommended debt relief services and how they compare.

Company Fees Minimum debt Learn more
National Debt Relief 15% to 25% of the total debt enrolled $7,500 Visit National Debt Relief
Freedom Debt Relief1 15% to 25% of the total debt enrolled $7,500 Visit Freedom Debt Relief
ClearOne Advantage2 20% of the total debt enrolled, on average $10,000 Visit ClearOne Advantage
JG Wentworth3 18% to 25% of the total debt enrolled $10,000 Visit JG Wentworth
Accredited Debt Relief4 15% to 25% of the total debt enrolled $10,000 Visit Accredited Debt Relief

Ask This Company About Paying Off Your Credit Card Debt

Learn how you could get out of $20K+ in credit card debt in as little as 24-48 months.5

Try National Debt Relief

How to refinance credit card debt

As for how to refinance credit card debt, there are several different ways to do it:

  1. Use a balance transfer credit card
  2. Consider a personal loan
  3. Use your home equity
  4. Borrow money from your 401(k)
  5. Consider a debt management plan
  6. Use a specialized credit card debt service

When deciding the best option, think about your credit history, cash availability, income level, and debt size. You can also decide based on whether you want to lower monthly payments or pay off debt quickly.

1. Use a balance transfer credit card

  • No need to pay interest if you qualify for 0% intro APR
  • Many balance transfer credit cards offer lengthy intro APR periods
  • Transfer amounts can’t be higher than the available credit limit
  • Typically has a balance transfer fee
  • You may not qualify if you have a low credit score

Consider a balance transfer to a lower APR credit card to save on interest. Ideally, you’d get a card offering an introductory 0% APR for over a year. But keep in mind that you might need to make a balance transfer within a certain period after account opening to qualify for the intro rate.

If you don’t qualify for a 0% intro APR card, you can still refinance by finding a lower APR card. Even a slightly lower APR can result in significant savings over time.

Keep in mind
Many card issuers charge a balance transfer fee, which is usually around 3%. Some cards also charge an annual fee, so you’ll want to figure out if it’s worth it to fork over the cash before you apply for the card and pay the transfer fee.

This method is best for those with small debt amounts that can be paid off within a year. Transfer limits typically match your new card’s credit limit, so if you can’t transfer all your debt, focus on the debt with the highest interest rate.

To find the best credit card for you, check out our list of the best balance transfer cards.

2. Consider a personal loan

  • You’ll have a longer time to pay off debt
  • Rates may be lower than a credit card
  • Some lenders may charge an origination fee
  • The lowest rates are reserved for those with excellent credit

A personal loan can be a viable option for credit card refinancing or debt consolidation. Debt consolidation loans often offer lower interest rates than credit cards, but may require good credit for loan approval and excellent credit to qualify for the best rates.

Getting a credit card consolidation loan can help manage payments, especially if you have a significant amount of debt. It allows you to borrow from a few thousand to several thousand dollars, transferring your high-interest credit card debts to your loan.

However, if you plan to pay off your debt in less than five years, consider using a balance transfer credit card with an APR introductory period. This could be more cost-effective as new loans may have origination fees on top of other charges, such as interest, late payment fees, and prepayment penalties, depending on the loan terms.

Explore your loan options in our list of the best personal loans.

Borrow Up to $35K with Flexible Terms

Learn More

3. Use your home equity

  • Rates are typically lower than credit cards
  • Can borrow large sums of money
  • You could lose your home if you fail to make payments
  • The best rates go to those with the high credit scores

If you own a home, you can tap into your house's value and take out a home equity loan or home equity line of credit:

  • Home equity line of credit (HELOC): Acts similarly to a credit card. You can borrow up to a certain limit, and during the draw period, you only pay interest on the amount you borrow. Once the draw period ends, you'll need to repay the entire loan amount, including the principal.
  • Home equity loan: Gives you a lump sum loan amount with a fixed interest rate, and you pay it back in an agreed amount of time. Both types of loans allow you to use that money to pay off your credit card debt.

You risk losing your home if you can’t keep up with payments.

A home equity loan or HELOC is a good option if you have a lot of credit card debt to refinance and want to pay it off over a long period of time, typically 10 or more years. As these loans are secured loans, the money amount you can borrow depends on your home equity.

Shop around at credit unions or online lenders to find the best rates. Keep in mind that the lowest rates of interest tend to go to people with the highest credit scores.

4. Borrow money from your 401(k)

  • No soft or hard credit pulls to secure the loan
  • Rates may be lower than credit cards
  • The interest you pay goes back to you
  • May impact your retirement
  • Potential tax implications
  • Need to pay back the loan in five years

If you have bad credit and can’t qualify for other options, you might consider a 401(k) loan. This doesn’t require established creditworthiness and may offer lower rates than credit cards. The loan repayments and interest charges go back to your retirement account, not to a bank or financial institution.

My experience with a 401(k) loan
When I took out a 401(k) loan, I found the process quite straightforward. After reviewing my plan's rules, I submitted a request and was surprised when I received the funds within a week without a credit check. The idea of making repayments with interest to my 401(k) account felt like borrowing from and paying back my future retired self.

Yahia Barakah, Editor

You can only borrow up to 50% of your 401(k) balance, up to $50,000. The IRS requires repayment within five years, and you can typically take out one 401(k) loan at a time. 

Keep in mind that You might have to repay your loan in full if you lose or quit your job. Failing to repay your loan could impact your retirement and may have tax implications, especially if you’re under 59.5 years old.

5. Consider a debt management plan

  • Someone helps negotiate lower rates or monthly payments on your behalf
  • You make a single payment, and the credit counseling agency takes care of the rest
  • There may be fees to use this service
  • Not all organizations are created equal

Don’t hesitate to seek help if you’re struggling with credit card debt. Credit counseling services can help you devise a debt management plan and negotiate with creditors. You deposit money with the counseling organization, which they use to pay your creditors, usually for a fee.

A debt management plan can be beneficial if you struggle with timely payments and need someone to negotiate lower rates and follow a payment plan for you. They can often negotiate lower payments or bring down higher interest rates and help you clear your debt in 36 to 60 months.

If you choose this path, vet your options carefully. Look for organizations accredited by the National Foundation for Credit Counseling (NFCC) and research thoroughly to avoid ones you shouldn't trust.

6. Use a specialized credit card debt service

  • Credit card debt services may help you get away from high interest
  • You typically get a fixed interest rate
  • Depending on the service, it may end up costing more than some other options
  • Some services, such as Tally, may require credit scores above a certain limit

Specialized credit card debt services, such as Tally, can help you figure your way out of your debt. To use Tally, you typically need a FICO credit score of 660 or higher. Tally conducts a soft credit inquiry during the application process, analyzing your debt balances and APRs to devise a debt payment strategy.

Once approved, Tally gives you access to a low-interest credit line. You can add your credit cards to the app, and Tally pays off your high-interest debt using your new credit line. You are then responsible for paying off your Tally credit line.

Tally simplifies your monthly payments by consolidating all of your card payments into one monthly bill. As you pay Tally back, you free up space on your credit line to pay off even more credit card debts. This way, Tally helps simplify the process of paying off your credit card debt and potentially saves you money in the long run.

Learn more in our Tally review.

How to pay off credit card debt faster

Paying off credit card debt faster can be done through a combination of lowering interest rates, increasing your monthly payment amount, and making more payments. If possible, stop using your credit cards to avoid racking up more debt.

Adding more money to your debt repayment is as simple as making extra payments. Start tracking your income to understand where your money goes each month to see where you can cut back and apply the difference toward your debt. If you’re ambitious, consider dedicating a few hours a week to one of the best side hustles that fit your schedule.

You can also use debt reduction strategies like the debt avalanche method and the debt snowball method. This can help when dealing with different types of debt, like auto loans or student loans.

  • The debt avalanche method involves prioritizing debt with the highest interest rate, giving you a faster and cheaper way to pay off debt.
  • The debt snowball method involves prioritizing debts with the smallest dollar amounts, giving you a quicker way to reduce your number of accounts with open balances.

As long as you have a solid plan in place and are committed, it’s possible to figure out how to pay off debt faster.

Credit card debt refinancing vs. consolidation

Credit card debt refinancing Credit card debt consolidation
  • Can be simple to figure out, especially when tackling a single debt
  • Often entails using a credit card with 0% intro APR for a limited time, most commonly 12 to 15 months
  • Often involves a balance transfer fee between 3% and 5% of the amount transferred
  • May include several credit card accounts, adding complexity to the process
  • Often entails combining outstanding credit card balances into one account, most commonly paid back over 3 to 5 years
  • May use a personal loan that comes with an application fee or origination fee.

Credit card debt refinancing is one of several ways Americans can tackle their debt. Another common method is known as credit card debt consolidation. This method is most often used to reduce the number of outstanding balances a person has by paying off their credit cards using one credit card, personal loan, or other means.

Credit card debt refinancing shares many similarities and a few differences with credit card debt consolidation. Credit card debt consolidation combines or consolidates your credit card debts by paying them off with a loan or other means, so you only have one monthly payment toward the debt payment method you used.

Credit card debt refinancing and consolidation can have slightly different goals:

  • Credit card debt refinancing: Often used to pay less in credit card interest charges.
  • Credit card debt consolidation: Often used to simplify your credit card bills by combining them into a single bill.

Learn more about the differences between credit card debt refinancing versus debt consolidation.

Is refinancing credit card debt a good idea for you?

Credit card debt has high interest rates, so minimum payments can lead to more interest charges. High balances can hurt your credit score and affect interest rates. Refinancing or consolidating your debt could save you a lot in interest, whether your credit is excellent or fair.

But before refinancing, check if it benefits your financial situation. For example, a home equity loan could risk your home if you miss payments, and a personal loan with an origination fee might cost more.

When is credit card debt refinancing a good idea?

Credit card debt refinancing can be a good idea if:

  • Your credit card is charging you a high APR, and you may get a lower APR or interest rate by refinancing your credit card debt
  • Your credit score is good enough to qualify for a lower APR on another credit card or a lower interest rate on a loan
  • Your credit score may benefit from lower credit card utilization by increasing your total available credit when you open a new credit card

When is credit card debt refinancing a bad idea?

Credit card debt refinancing can be a bad idea if:

  • You don’t remember to pay your bills on time since opening another credit card may add to the problem rather than help
  • You can’t qualify for a 0% intro APR or low APR credit card, or a low-interest loan
  • You may pay a balance transfer fee high enough to eliminate or minimize the benefits of refinancing your credit card debt
  • You won't be able to pay off the card by the time the introductory 0% APR ends

Alternatives to refinancing credit card debt

There are several alternative options to credit card debt refinancing that can help you with your personal finance, including debt settlement, debt management, and bankruptcy.

Seek debt settlement

In some cases, a lender may be willing to settle your debt for an amount lower than what you actually owe. Credit card companies may consider a debt settlement to ensure you don’t file for bankruptcy, which may eliminate the debt.

It may be worth trying this debt settlement method by contacting your credit card issuer and asking if they are willing to settle your debt for a lesser amount. Alternatively, you can also use a debt settlement company such as Freedom Debt Relief to benefit from its experience.

Find out more in our Freedom Debt Relief review.

Use a debt management plan

Setting up a debt management plan often begins by contacting a credit counseling agency that can help negotiate your debt and repayment terms. The agency can then establish a repayment schedule for you to pay off your debt.

Credit counseling agencies act as a middleman between you and your creditors. Sometimes, you may directly pay the credit counseling agency, and then it pays your creditors.

Credit counseling agencies can be both for-profit and nonprofit organizations. Even nonprofit agencies may charge small fees. When vetting your options, make sure to work with an organization accredited by the National Foundation for Credit Counseling (NFCC).

Consider bankruptcy

Consumer debt and credit data from the Federal Reserve Bank of New York showed that the average credit card debt delinquency rate increased in the fourth quarter of 2022. When all else fails, bankruptcy may be your only way to become debt-free, although it isn’t an easy option.

There are several pros and cons to bankruptcy, but instead of viewing bankruptcy as a failure, consider it a way to restructure your finances. It helps you discharge certain debts, stop collection calls and wage garnishments, and relieve yourself from financial stress.

Depending on your situation, you may qualify for Chapter 7 or Chapter 13 bankruptcy. Both bankruptcy types can help you move past certain debts. However, you may lose certain assets and damage your credit score for several years.

Chapter 7 bankruptcy typically liquidates some assets and allows you to discharge most unsecured debts, while Chapter 13 bankruptcy involves creating a repayment plan to pay off your debts over a period that normally lasts 3 to 5 years.

Credit card debt refinancing FAQ

Do balance transfers hurt your credit?

The effect of a balance transfer on your credit score can be positive or negative, depending on your exact situation. A balance transfer may hurt your credit score if you go past the due date or if you continue to accrue debt on your credit cards.

On the flip side, a balance transfer may improve your credit score if you make on-time credit card payments and use your credit cards responsibly. Additionally, opening a new credit card account increases your total credit, which may lower your credit utilization and improve your credit score.

Will refinancing my credit card debt hurt my credit score?

The impact of refinancing your credit card debt on your credit score depends on the refinancing method you use. Your credit score may take a hit when you apply for a new credit card or a personal loan since they require hard inquiries that go on your credit report with one or more of the credit bureaus. But your credit score may recover once you establish a positive payment history and successful debt reduction.

What happens if I don't pay my credit card debt?

When you stop paying your credit card debt, your credit card issuer will charge you late fees, your balance will increase in line with your APR, and your credit score will likely drop. The longer you don’t pay your credit card debt, the harder it may be to pay it off. Eventually, your credit card debt may be sent to collections, and you may be able to reach a payment plan with the collection agency.

Is it better to refinance or pay off credit card debt?

If you have the funds to pay off your credit card debt, it’s probably better than refinancing your debt since paying off your debt eliminates interest charges.

However, suppose you can refinance your credit card debt using a 0% intro APR credit card for a year or more. In that case, you may benefit from putting your money in a savings account, earning interest on your savings balance, and making the payments needed to eliminate your debt before the 0% introductory APR period ends.

How long does it take to refinance credit card debt with a personal loan?

The amount of time it takes depends on the lender and your personal situation, but generally, it can take anywhere from a few business days to a few weeks. Some factors that affect the time frame are:

  • How quickly you complete the personal loan application and submit the required documents, if any. These documents may include proof of income, bank account statements, or other documents.
  • How fast the lender verifies your information, which may include performing a credit check or reviewing documents you submitted.
  • How soon the lender approves your loan and disburses the funds to your bank account or to your creditors.

Make sure to compare credit card debt refinancing loan offers from multiple lenders and consult a credit counselor or a financial advisor before making any decision that affects your finances.

Credit card debt refinancing: bottom line

Credit card debt refinancing is a creative financing tool you can use to manage your credit card debt and pay it off over time. Credit cards with high APRs can be challenging to pay off because so much of your monthly payments go toward interest charges.

By refinancing your credit card debt to have a smaller APR or lower interest rate, you put more of your monthly payment toward the principal amount you owe. This should help you pay your balance off faster and get out of debt sooner.

National Debt Relief Benefits

  • No upfront fees5
  • One-on-one evaluation with a debt counseling expert
  • For people with $30,000 in unsecured debts and up

Author Details

Sarah Li Cain

Sarah Li Cain is an experienced content marketing writer specializing in FinTech, credit, loans, personal finance, alternative investments, real estate, banking, international business and travel. Her work has appeared in Fortune 500 companies, publications and startups such as Transferwise, Wordpress, Pearson Teachability and KeyBank.

Author Details

Yahia Barakah, CEPF

Yahia Barakah, CEPF, is a Senior Editor at FinanceBuzz and has created finance-focused content since 2011. As a Certified Educator of Personal Finance, he has a background in institutional investment and asset management, as well as a deep passion for financial literacy.