2 Easy Ways to Refinance Credit Card Debt

Easy Ways to Refinance Credit Card Debt - picture of hand putting credit card through credit machine

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Want to supercharge your savings? It’s time to refinance your credit card debt!

Honestly, we can talk about destroying your debt until we’re blue in the face…and then we’ll talk about it some more. It’s that important.

Debt sucks. Your debt is the biggest obstacle standing between you and financial freedom. It’s robbing you of your ability to make choices, eliminating your options, and keeping you tied to the wage slave lifestyle you’ve come to despise. And why wouldn’t you? Are we really made to punch a clock day after day, beg for time off, and desperately search for ways to stretch those 10 vacation days just to enjoy life a little bit?

No. We’re not.

And the fact is, you don’t have to live like that. When you’re not buried in debt, you have options. You can take risks, look for better jobs, or strike out on your own. You can even stay right where you are, negotiate a better deal, and have the money to do the things you want. But, right now, your debt is holding you back…and it’s time to take control.

Prepare to Eliminate Credit Card Debt

In the past, we’ve talked about how you can refinance your mortgage and student loans in order to save money. At least with those types of debt, you got something for it. When it comes to credit card debt, what did you get? A whole lot of junk you didn’t need in the first place. Check out these easy ways to earn extra money, even make up to an extra $500 a monthto start tackling this crazy debt!

So, just to get yourself in the mood, think about what those two dozen pairs of shoes and your $500 handbags really cost you. What kind of experiences could you have paid for? What did you miss out on because you had to work harder and longer just to pay the bill back? It’s time to get mad…and get back to even.

[bctt tweet=”It’s time to get mad…and get back to even! #creditcarddebt #debtsucks”]

Before you do anything else, let’s get the basics in order. If you’re serious about getting out of debt, you need to implement two items into your monthly plan:

  1. A Zero-Sum Budget – Did I just say monthly plan? Yep. It’s time that you create one. A budget is the the most powerful financial tool you can use to get your finances straight. Use your last month’s income to budget for all of your expenses this month. Don’t have enough to pay the bills? It’s time to consider cutting some of your spending. Get yourself on a budget that works, and create a plan for all of your spending this month. Here’s a step-by-step guide to help you pull it all together!
  2. Track Your Spending – To drag yourself out of debt, you need to know where your money is going. Tracking your spending is a great way to account for every dollar you spend. It gives you a clear picture of exactly what you’re spending on, and it helps you understand exactly how it’s affecting your life. A great side benefit is that you’re able to identify areas where you are overspending, know exactly where you can make cuts, and use that money for other things – like paying off your credit card debt.

2 Easy Ways to Refinance Your Credit Card Debt

Now that you know your credit card debt is standing between you and your dreams, its time to bust that shit to pieces! Let’s pay those suckers off at lightning speed.

You want to get rid of this debt as quickly as possible so you can save money and move on with your life. To do that, you’ll want to use either the Debt Snowball or the Debt Avalanche payoff method. Either of these works fine. The point is to pay them off fast!

Even though you’re going to be paying these debts off at warp speed, you can save money and pay them off even faster by refinancing it. There are 2 methods for refinancing credit card debt that work best: Personal loans and using balance transfer cards.

Using a Personal Loan to Refinance Your Credit Card Debt

Refinancing credit card debt using a personal loan can help you pay your debt off faster. By refinancing high-interest credit cards to a lower rate, you can save yourself thousands of dollars in interest and get on a schedule to pay off the card completely. For example, if you make monthly payments of $50 on credit card balances of $5,000 at just 12.99% interest, you’ll never pay it off!

But, if you refinance those cards to a rate of 6%, your minimum payments of $55 will allow you to pay the debt off in 10 years. Huge difference, right?

Using a personal loan to refinance your credit card debt works best when you owe thousands of dollars and need a little bit of time to pay them off. You may even want to wrap some of  your other debt, like auto loans, into a personal loan. Most personal loans have a minimum loan requirement, and term lengths typically start at 3 years. Of course, you can pay it off early if you like, provided there are no prepayment penalties. (Avoid loans with those like the plague!) Typically, you’ll also need very good to excellent credit to qualify – although some companies don’t base your creditworthiness on your credit score alone.

If you have good credit, SoFi is a great place to search for personal loans. Currently, they offer fixed rates starting at 5.99% APR*. There are no origination fees, and term lengths are 2 to 7 years. They do have a minimum loan requirement of $5,000 ($10,000 for California residents). Click our (affiliate) link for more information on SoFi Personal Loans.

Using a Balance Transfer Card to Refinance Credit Card Debt

Another way to refinance credit card debt is through the use of a balance transfer card. By moving your high-interest credit card debt to a card with an introductory 0% APR, you can save oodles of money in interest. And, when you’re not paying interest, more of your payments go toward the principle, eliminating your debt faster.

Think of it like a short-term loan. Transfer small amounts of credit card debt to a balance transfer card, enjoy no interest for the introductory period (generally 12-21 months), and pay the card off before the interest rate adjusts. Knock your debt out quickly and save money.

>> Compare our favorite balance transfer cards here

Tips and Tricks

Refinancing credit card debt may be able to help you save thousands, but only if you do it the right way. If not, you could end up finding yourself deeper in debt than you were before. Here are a couple of tips to help you get the most out of credit card refinancing:

  • Make sure you don’t use this to create more debt for yourself. Don’t refinance and just to rack up more debt! You need to stick to your budget and pay it off. The goal is to get ahead, not fall further behind. Change your habits, change your ways, and change your life for good!
  • Pay off your balance transfer card on time. Moving money to a balance transfer card can be a great strategy…if you pay it off on time. Once the introductory APR period is over, rates generally adjust somewhere between mid and upper-teens. So, pay it off and avoid the interest rate. Find our favorite balance transfer cards by following the image below.

The Final Word

Saving money through credit card refinancing is a great way to supercharge your savings. But, this only works if you’re willing to change your habits. First, you need to understand how you got into debt and make a commit to avoiding it in the future.

Once you get out of credit card debt, hold the line. Don’t fall back into old habits or you’ll find yourself right back where you started.

We hope this tutorial was helpful! As always, fire away with your questions below!

This piece is part of the “Supercharge Your Savings” series. You can find other articles in the series listed below:


* SoFi Disclaimers

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  1. A balance transfer to a 0% APR credit card can be a good way to save on interest if you have a large credit card balance currently accruing interest. One thing people should keep in mind is that having 0% APR isn’t an excuse to lag on paying off your debts. You should still be tackling it aggressively.

  2. “Debt sucks. Your debt is the biggest obstacle standing between you and financial freedom. ” — YES! This is everything I write about and advocate. Whatever you can do to get out of debt asap – do it.

  3. I referred my sister to the Chase Slate and it’s been a big win for her this year. She’ll pay off the rest of her credit card debt selling her employee stock she gained through her ESPP. Sometimes a balance transfer is all someone needs to spark their interest and have a mindset shift of “I can do this. I can manage my finances.”

    I’m all about the numbers when it comes to interest rates and debt paydown vs. investing so I naturally love the message of this post!

  4. “Make sure you don’t use this to create more debt for yourself.” YES!! Refinancing to get a lower rate is a great way to save money but it will all be for nothing if you continue to rack up more debt.

  5. Great write-up Greg! It always amazes me to talk to people that are in debt, want to get out but don’t realize the options they have to save & pay it off quicker. As long as they’re committed to killing the debt & maintaining a changed attitude towards money it only makes sense to find ways to reduce the overall burden.

  6. It\’s crazy to carry credit card debt if you\’re able to refinance it. It is important to get control of your spending though. Put those credit cards on ice (literally). Put them in a block of ice in the freezer and keep them just for emergencies.

  7. If you are not in a position to where you think that you can pay your credit card debt off in 6-12 months, then I would suggest consolidating it into one loan. I would then out those cards somewhere that you cannot touch them. Pay the loan off with good and regular payments. Budget more in your day to day life, so you can try to pay the loan off quicker. Thanks for sharing!

  8. CherylDoughten says:

    I would like the number to chase slate.

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