: Want to pay off your credit-card debt — and move to a lower interest rate? More people are trying this trick.

by | Aug 19, 2023 | Stock Market

Digging your way out of debt may require some creative thinking. It’s a time of mounting financial pressures. Americans now have a collective $1 trillion in credit-card debt and delinquency rates are rising. The balance carried monthly climbed to $5,947 in the second quarter, up from $5,270 a year ago, TransUnion said in a recent report.

The almost 11.5% average interest rate for a two-year personal loan is around half the average 22% APR for a credit card carrying a balance and accruing interest, according to Federal Reserve statistics through May. Of course, some personal loan rates can go to the mid-20% range or even higher, depending on the lender. All of this debt is coming at a bad time. Pandemic-era excess savings are running out, and federal student-loan payments will resume in October. One solution: a personal loan to consolidate credit-card debt could be a way to relieve the pressure. The first — and perhaps obvious — question to ask: do you have a good credit score? This is key for those who wish to land a loan from a bank or fintech that has an interest rate lower than a credit-credit card interest rate. It’s possible to achieve this even when so many interest rates are climbing. Credit-card debt consolidators were able to slash nearly half of their balances on average and improve their credit score by 18 points on average, according to research released last week from TransUnion
one of the three big credit bureaus a …

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