Credit Card Refinancing Vs Debt Consolidation Which Is Right For You[yoast-breadcrumb]
The main differences between credit card refinancing and debt consolidation are:
- Credit card refinancing involves transferring credit card balances to a new card, usually with a lower interest rate or intro 0% APR offer. Debt consolidation involves taking out a new personal loan to pay off multiple debts.
- Credit card refinancing only addresses credit card debt. Debt consolidation can consolidate any type of debt, including credit cards, medical bills, personal loans, etc.
- Credit card refinancing typically has a shorter 0% intro APR period (12-18 months) compared to a debt consolidation loan (3-5 years).
- Credit card refinancing does not have a fixed repayment schedule. Debt consolidation loans have fixed monthly payments and terms.
- Credit card refinancing may have balance transfer fees. Debt consolidation may have origination fees.
- Credit card refinancing keeps revolving credit card accounts open. Debt consolidation closes accounts and replaces with a fixed loan.
In summary, credit card refinancing provides short-term interest savings on credit card balances specifically. Debt consolidation allows you to consolidate any debts into one loan with fixed payments and terms, but may cost more over the full repayment period. The best option depends on your specific debt situation.