A Smarter Way to Dig Your Way Out of Credit Card Debt
For many people juggling multiple credit card balances with high interest rates, getting out of debt can feel like an uphill battle. With due dates scattered across the month and interest piling up faster than payments can keep up, it’s easy to feel stuck. That’s where a debt consolidation loan—what we here at the Ashland Community Credit Union call a “Get Out of Debt” (GOOD) loan—can be a game-changer.
Some critics argue that debt consolidation is “just moving debt around,” but in reality, this financial strategy can offer real and measurable benefits, especially when the terms are favorable. With fixed interest rates as low as 9.47% APR and a single, predictable monthly payment, debt consolidation loans are helping many people regain control of their finances.
Here are the real advantages of consolidating your high-interest credit card debt into a single loan:
Lower Interest Rates Mean Real Savings
One of the biggest advantages of a debt consolidation loan is the potential to significantly lower your interest rate. Right now, the average credit card interest rate in the U.S. is 24.33%, and retail credit cards are even higher, averaging a record 30.45%. Wow!!! In contrast, at the time of this writing, debt consolidation loans from Ashlad Community Credit Union offer fixed interest rates as low as 9.47% APR.
That difference adds up—fast.
Example:
Let’s say you owe $10,000 in credit card debt. If you're making minimum payments at an APR of 24.33%, it could take decades to pay off, and you could end up paying over $13,000 in interest over time.
Now, compare that to a $10,000 debt consolidation loan at 9.47% APR with a fixed 60-month term:
- Monthly payment: approx. $210.42
- Total paid over 5 years: $12,625.41
- Total interest paid: $2,625.41
That’s over $10,000 in potential interest savings, plus the peace of mind that your debt will be completely paid off in five years.
One Predictable Monthly Payment
Managing multiple credit card bills with varying due dates and interest rates can be a challenge. And if you miss a payment or more, then more than one debt collector is calling.
A debt consolidation loan simplifies your finances by rolling all those debts into one fixed monthly payment. That means:
- Less chance of missing a payment
- Easier monthly budgeting
- Less stress and mental fatigue
A single payment keeps you organized and on track.
Faster Debt Payoff
With lower interest and a set repayment schedule, many people pay off their debt years faster through consolidation than by making minimum payments on credit cards. The structure of a debt consolidation loan encourages consistent progress toward becoming debt-free.
Fixed Payoff Timeline
Credit cards are revolving credit, meaning the debt can continue indefinitely if you’re only paying the minimum. A consolidation loan gives you a fixed payoff date, up to 60 months, so you know exactly when you’ll be debt-free—no surprises. You can reset your current budget so you won’t get in deeper, and you can look forward to a specific date when those dollars you're spending every month will be yours to keep instead.
Potential to Improve Your Credit Score
While opening a new loan might cause a temporary dip in your credit score, consolidating your credit card debt can help in the long term. By lowering your credit utilization ratio and making on-time payments, you can see your score begin to recover—and potentially rise.
Too often, folks who have low credit scores are hesitant to do anything that might make the score lower, even in the short term. Here at the Ashland Community Credit Union, we put much less weight on credit scores and more on you and your unique situation. We’ll never penalize you for trying to do the right thing.
Is It Right for You?
A debt consolidation loan isn’t a magic fix, but it is a powerful financial tool. If you’re serious about getting out of debt and improving your financial health, it could be the solution you need to simplify your payments, reduce your interest costs, and take control of your future.
If you're feeling buried under high-interest credit card debt, now might be the time to explore whether a debt consolidation loan could give you the clarity and savings you’ve been searching for.
Debt consolidation isn’t just about moving money around; it’s about moving forward. With the right strategy and the right loan, you can finally take real steps toward living debt-free.
If you’re ready to explore your options or want help deciding if a debt consolidation loan is right for you, reach out to Ashland Community Credit Union. Our team is here to guide you through the process, answer your questions, and help you build a stronger financial future—one step at a time.
