When things have built up and gotten out of control one option to make your finances more easily manageable and possibly save your credit is to consolidate credit card debt.

When you get a consolidation loan the money pays off all of your card balances. You then start making one monthly payment on the loan, which should have a much lower interest rate than you’re currently paying.

Credit cards are well known for having high interest rates which make the debt amount grow higher and takes you more time and money to pay them off. When you consolidate credit card debt it lowers that rate and gives you one monthly payment on the loan, making the situation much more easily managed.

There are several loan options. I recommend looking at financial instituitions you already are a customer, especially credit unions because they usually have the lowest rates.

If your credit is favorable you can look at unsecured consolidation loans. The downside here is that you will have higher rates than with other options, but still much lower than what you are paying currently.

For a secured loan you will have access to the lowest possibly interest rates. In exchange for this benefit you risk losing whatever property you put up for collateral if you miss payments on the loan, typically your home or vehicle.

If you are missing payments you are damaging your credit report. If your debt becomes so unmanageable you get to a point where you are considering bankruptcy as an option you’ll be doing very serious credit score damage. If you are able to manage a consolidation loan the payments over time will help your report as you’ll establish a history of timely payments.

When you’ve gotten into an overwhelming financial situation one way out is to consolidate credit card debt.