This One Move Could Wipe Out Your Credit Card Debt Faster Than You Think
Many Americans find themselves caught in a seemingly hopeless pattern of using credit cards to pay for luxuries and necessities. In a perfect world, we would never have to use credit to purchase things, but the harsh reality is that there are millions of people who use credit cards for a wide variety of reasons.
More and more people are using personal loans for credit card debt. A debt consolidation loan can lower your interest rate, streamline your monthly payments, and help you make real progress on what you owe. If you’re looking for strategic ways to eliminate your credit card debt, a personal loan may be the right choice for you. Before you apply, consider the factors that we’re going to discuss today.
The Truth About Interest Rates
Credit card interest rates are high right now. As of June 2025, the average credit card APR is 20.15%. With a rate that high, the majority of your minimum monthly payment is going to interest instead of attacking your principal balance. That’s why credit card debt has the potential to stick around for years, even if you make your monthly payments on time.
In contrast, personal loans have an average interest rate of around 12.65% APR, depending on your credit score. Over the life of your personal loan for credit card debt, that difference could save you thousands of dollars while also helping you get out of debt faster. To make things even more appealing, personal loans have fixed rates and set payoff dates, which means you can determine exactly when you can be debt-free.
When Do Personal Loans Make Sense
A personal loan for credit card debt isn’t a one-size-fits-all solution. For many people who are paying off credit cards, taking out a loan from a bank or lending institution isn’t the most responsible choice. Still, there are other instances in which getting a lump sum of cash from a bank at a fixed interest rate can help you get out from under those high-interest credit card payments.
If you have a good credit score, which is typically 670 or higher, you may be able to qualify for a personal loan with interest rates that are lower than the rates on your credit card. If your credit score is excellent, meaning it’s 800 or higher, you might even be able to get interest rates that are in the single digits. Lower interest rates mean that more of your money goes toward principal, which helps you pay your debt down faster and more efficiently.
A debt consolidation loan is also a viable option if you have multiple credit card debts. When you have multiple credit card payments due each month, it’s easy to let one slip through the cracks. Not only does a single month of missing your payment hurt your outstanding balance, but it can also damage your credit score. By choosing a debt consolidation loan, you can reduce the chances of a missed payment, late fees, and added interest.
If you want to know exactly when you’ll be debt-free, using a personal loan for credit card debt is a solid option. This aids in financial planning and is especially important if you’re hoping to accomplish something with your money, such as purchasing a new home, in the not-so-distant future.
When You Should Skip the Personal Loan
Using a personal loan for credit card debt isn’t the right choice for everyone. Depending on several factors, other debt repayment strategies might be more effective or more sustainable. For example, if you have a relatively small amount of credit card debt that you can pay off in the next 12 to 21 months, you may be better served by paying it off with a balance transfer.
Many cards offer a 0% introductory APR to new clients. This allows you to tackle your current credit card debt without any interest. When every dollar you pay goes toward principal, you can bring your debt down quicker and more efficiently.
A debt consolidation loan also isn’t the best option if you still haven’t addressed the habits that caused the debt. While some people fall into crippling credit card debt because of unavoidable financial hardships, others get into trouble with credit cards because of overspending.
If you’re in credit card debt because of a problem with overspending that you still haven’t addressed, a loan isn’t going to help. Instead, it will just add to your mountain of debt. If you’re not prepared to break the bad habits that got you into financial trouble, a loan won’t help. Instead, you need to determine how to change your mindset and financial behavior so you can formulate a plan that can get you out of debt.
Final Thoughts: Is a Personal Loan the Right Choice for You?
Credit card interest rates have the potential to completely upend your financial future. Knowing how to break free from the cumbersome weights of these high rates can help you create a plan that sets you up for success in the future. Personal loans provide lower APR options than you can find on credit cards, especially if you have good credit.
The most important part is to develop a plan and be ready to stick to it. If the goal is to break free from the burden of credit card debt, a personal loan can be a great tool. However, the most important part is to make lasting changes to your spending habits so you don’t land in the same situation in the future.