TULSA, Okla. — Carrying a balance on one or more credit cards can be costly. The Federal Reserve reports the average annual percentage rate for cards with a balance is just over 22%.
One option to escape those high rates is consolidating the credit card debt into a personal loan at a much lower interest rate. But, taking out a new loan can feel intimidating when you're already dealing with credit card debt.
Matt Schulz, of LendingTree, said the savings can make it worth the step.
Personal loans often have much lower interest rates than credit cards.
A new LendingTree study shows shopping around for a personal loan is important. Depending on your creditworthiness, interest on personal loans from a bank averages 12% for a three-year note, while credit unions are a bit lower at just over 10.5%.
"What we're talking about is potentially saving $1,000 or $2,000 by shopping around depending on the size of the loan that you're looking at," Schulz said.
Mary King-Moore told 2 News Oklahoma she used a personal loan to consolidate credit card debt earlier in her life.
"I just remember it was set payments and I was able to transfer like 2 or 3 credit card balances over to one, and then, with the set limit, I think it was like in 2 years and 24 months," Mary said.
She said paying it off felt great.
Schulz says the key to making the interest savings from consolidating credit card debt into a lower interest personal loan work is to focus on paying off the personal loan without running up more debt on credit cards.
This story was reported on-air by a journalist and has been converted to this platform with the assistance of AI. Our editorial team verifies all reporting on all platforms for fairness and accuracy.
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