Credit Card Debt Consolidation

This topic is our biggest question we get asked by our customers, most people at some stage in their life find themselves dealing with a credit card debt.

You are not alone and we explain how you can help yourself and  save yourself a lot of stress and hassle.

What’s the best way to deal with large credit card debt? Tips & Tricks

Make a list of all your debts – that’s credit card, store card, overdraft, loan and mortgage.

Work out what you’re paying each month.

Create a budget to see how much you need to spend every month on the basics.

Make a conscious decision to focus on getting rid of your debt, by sticking to monthly repayment schemes and reducing the amount of money that you spend on things that you might not really need.

If you have several debts across different lenders, you might want to consider a debt consolidation loan. This means that you can bring together credit card debts – as well as overdrafts and store cards – and have one consolidated loan, with one monthly payment, to one lender with one payment of a fixed date and only one interest rates. 

Young couple sitting on couch in front of psychologist and listening to her advice at meeting

How to pay off and clear large credit card debt

Take a close look at your credit cards to find out where you are paying the most interest to. 

Make this the debt that you pay most towards every month, while keeping up minimum payments on any other cards. When one card is paid off, move to the next highest interest rate.

Can you pay more than the monthly minimum payment?

This will really help to clear your debt. Make sure that you set up a direct debt payment to make sure that your payment happens every month – this will help you avoid unnecessary fees. 

You might want to look into a new credit card, with a 0% balance transfer. You will probably incur a fee, of 2%-3% of the overall balance, but use it only to make repayments and work to pay it off at 0%.

Can you pay a credit card with another credit card?

The quick answer is yes, but not really. It is possible but it’s not advisable as you will only be moving debt from card to card. To pay off one credit card using a different credit card, it will mean that you have to manually draw cash from one credit card, using an ATM, and either pay it into your bank, using the pay slip on your statement, or pay it into your current account and pay your credit card balance online. It’s not straightforward for a good reason.

Should you pay your credit card early?

You will know that you have to make at least your minimum payment by their due date every month, or late payments might impact your interest rates and bring fees and charges. However, you might be able to improve your credit score by making your credit card a week or two in advance of the actual date. This is because you will reduce the total balance that your card issuer reports to the credit record providers. This lowers your credit percentage used when working out that month’s credit score, which can be good for your credit score. 

Can you cancel a credit card before paying it off?

No, you will need to pay a credit card off in full before you can cancel it. If you wish to pay off the card and then cancel, you can let your credit card provider know. It will remain on your credit report until paid off and then cancelled. 

Does declaring bankruptcy clear credit card debt?

By declaring bankruptcy, it means that you will not be liable for all of your debts but you will have to continue paying some debts, such as student loans, court payments and secured loans. 

A bankruptcy period is usually one year and unsecured debts can be written off only after the one-year period ends. Unsecured debts include credit card debts. You will need to keep paying your mortgage and other essential bills even in a state of bankruptcy.

How to negotiate lower credit card debt

Negotiating reduced payments is one way of reducing your credit card payments. This might be on a short-term basis or over a longer term. You will need to show your credit card provider that – and why- you cannot afford to make the current repayments, by showing them a household budget.

Reduced payments will impact your credit rating and could lead to a default on your account. Lenders may also negotiate reduced payments for a fixed period of time and may not renew the agreement, passing the debt to a collection agency. 

You may be offered a refinancing option, which is a new loan that will cover the cost of your debt over a longer period of time. It should have less of an impact on your credit score as you won’t be making reduced payments, but you will pay more in the long run.   

Are credit cards good or bad?

Here are some Pros & Cons

Credit cards can be helpful, for everything from secured online purchases to making big purchases at short notice. 


  • They are easy to use and accepted in by many businesses, including online and via the phone.
  • They offer the option to pay off your debt over time.
    Some lenders offer low introductory rates, that can be helpful to make big purchases and pay them off quickly. 
  • Many cards have a loyalty scheme that offer rewards.
  • Credit cards can be more secure than ordinary banking cards, meaning that any fraud won’t drain your day-to-day banking account. 


  • Credit cards can make you feel like you have more money to spend than you actually do
  • Spending on a credit card means that you are spending future money that you have not earnt yet.
  • Interest rates and fees will mean that you always pay back more than you spend.
  • You will need to make more than the minimum payments if you are to keep your debt under control and reduce it.
  • A large credit card debt can impact your credit score and affect your chances of taking out a mortgage.

Why credit cards are bad

Credit cards can be bad because they offer easy borrowing at the cost of high interest rates, with low minimum payments that make you think you’re making a dent in your borrowing, Credit cards are also often used to make purchases that can’t be counted as assets and are instead made for lifestyle purchases.

Why credit cards are good

Used responsibly, credit cards can help you make big purchases that you don’t have the time to save for. Credit card purchases are also protected, especially over the internet. Some credit cards have specially-offered low interest rates that can be advantageous if monthly repayments are made on time and in full. 

Average time to pay off credit card debt

It is estimated that it will take 25 years to pay off the average credit card debt. Based on an average household credit card debt of £2,293, making the minimum repayment each month would mean that the debt is paid off in 25.4 years. This is due, in part, to the minimum repayments, which are often very low. They are usually a percentage of the total debt, so every payment reduces the minimum amount you repay slightly. These smaller payments mean that it will, ultimately, take longer to repay the debt, with the amount you owe increasing as the interest adds up over the longer period of time.

Is it a good idea to consolidate credit card debt?

Whether consolidating your debt is a good idea depends on both your personal financial situation and on the type of debt consolidation being considered. Consolidating debt with a loan could reduce your monthly payments and provide near term relief, but a lengthier term could mean paying more in total interest.

How does credit card debt consolidation work?

Credit card debt consolidation is when you take out a new loan that will cover your existing debt. You pay your existing credit card debt with the loan and then make one fixed monthly payment to your consolidated loan lender. A consolidation loan means that you can bring together your loans and, often, reduce the amount you are paying out monthly.

Where do I consolidate credit card debt?

There are many lenders that offer credit card consolidation loans. These types of financial solutions are helpful for those who want to simplify their borrowing and repayments, by rolling multiple debts into one single monthly payment to one lender, with one interest rate. 

How to consolidate debt using a credit card

You can reduce the interest you pay on balances across multiple credit cards by moving your debts to one consolidation credit card that will charge a lower interest rate or that offers an interest-free period.

The benefits can include quicker repayment as it can cost you less to clear your debts as your interest rate goes down and more of your money goes towards paying off your balance. One payment to one lender can also make it much easier to keep a track of your debt, removing the fear of missing many different payment dates with different amounts and interest rates every month.

debt management

Other Credit Card Debt Common FAQs

What credit card is right for me?

Work out why you need the card. An upcoming large purchase might make a 0% purchase credit card best for you, but, if you have existing credit card debt, you might save with a 0% balance transfer credit card, which will give you a break from interest payments for a set time. Some credit cards also offer a low rate of interest for life. If you clear your balance every month, a rewards credit card might work for you.

How much can I borrow?

Your lender will determine your credit card provider and set a credit limit, which can range from a few hundred to many thousand pounds. Your limit is based upon your credit score, your income and your other financial outgoings.

Can I change my mind after I’ve applied?

Yes, credit card providers include a 14-day cooling-off period in which you can inform them that you want to cancel the agreement. If you’ve used the card already, you must repay the outstanding balance within 30 days.

Can I pay off my credit card debt early?

Yes, you can pay off your card and close it whenever you like, without financial penalties. 

Can I get a joint credit card?

No, but you can include additional cardholders who will have their own card. There’ll be one credit limit on the account and the primary cardholder will be responsible for the debt.

Can I use my credit card abroad?

Yes, but many credit cards add a foreign transaction fee of about 3% for every transaction. Credit card cash withdrawals abroad also attract charges, with interest charged instantly.

If I don’t need to borrow, should I still get a credit card?

All credit card purchases, over £100, are protected under Section 75 of the Consumer Credit Act. This protection means that, if goods bought don’t arrive or are faulty, or the company goes bust, both the supplier and the credit card company are jointly liable and you should get a refund.

Can the interest rate on my credit card change?

Yes, it can. Interest rates on credit cards are often variable, so interest rates can be increased or decreased any time and your monthly repayments will track these changes.

What happens if I can’t keep up with my repayments?

A late or missed payment brings a charge of around £12 and it will be marked on your credit report. You might also lose any 0% offer if you have one.

Do credit cards charge annual fees?

Some credit cards, especially those that offer rewards or incentives, might charge annual fee.

What is the minimum monthly repayment?

The minimum monthly repayment is usually 1% of your balance, plus that month’s interest, or a fixed sum of £5 – whatever is the greater amount, This will also depend on your credit card supplier. 

Can I get a credit card with a poor credit score?

Yes, but you might have higher interest rates or a low credit limit.

How much credit card debt is normal?

It does vary from household to household, but by August 2020, the total outstanding credit card debt reached £62.3 billion. Averaged out across UK households, it means that the average credit card debt is £2,241 per household and £1,184 per adult. However, some will owe much more and others a lot less. 

What happens to credit card debt when you die?

Credit card debts do not die when you do. They will have to be paid off. The executor of your estate, according to your will, must use your assets to pay off your credit card debts. Depending on your level of debt and your level of assets, there may be considerable funds left over to your heirs or none at all. 

Can you get a mortgage with credit card debt?

Credit card debt might make taking out a mortgage a bit harder, but it can be done. Mortgage lenders assess your financial situation and measure the risk. Some lenders see credit card debt as a liability while others see a good repayment history.  Mortgage lenders look at your income and your monthly outgoings to see how much you can afford to repay every month. 

How will my debt affect my mortgage application?

It depends on the amount and type of debt that you have – as well as the reasons for your debt. Your response to your debt will also be taken into account. Lenders can show understanding depending on the type of spending that accrued the debt – they are more likely to respond to a spend born out of necessity, rather than lifestyle spending and non-essential shopping. 

Will my debt affect how much I can borrow for my mortgage?

Mortgage lenders will mostly assume that you can pay back between 3 and 5% of your credit card debt every month, using this to help calculate what size of mortgage you could afford to take on. The more reasonable your monthly outgoings, the greater amount of mortgage you could be offered. Lenders will work out your loan to income ratio and then multiply that amount (dependent on lender) to determine the total loan amount. Applying jointly with someone else could boost your loan amount if they are financially secure, but also impact your loan amount if they are in debt. 

Can I re-mortgage with credit card debt?

Your re-mortgage can depend on the size of your debt. It might help you to understand how much you can borrow, based on your income, outgoings and credit rating, the equity in your property and how much you can pay back. It is possible but there are other, more straightforward financial options – like a new mortgage offer – available.  

Can I pay off catalogue debt with a credit card?

You can make a cash withdrawal and use the cash to pay off your catalogue debts, but please do work out which has the highest interest rate. You may prefer to take out a new balance transfer cards, with a 0% offer rate, so that you are only paying off the debt rather than the interest, but please make sure to complete repayments within the 0% offer period.

Can you do a direct debit from a credit card?

No, credit cards don’t let you set up Direct Debits. There is a credit card ‘version’, which is called a ‘Continuous Payment Authority’ (CPA). It’s like a Direct Debit, but it offers you a lot less protection and have some key differences:

  1. The company can change the payment date and the amount without telling you.
  2. A CPA is not protected by a Direct Debits Guarantee
  3. CPAs can be set up immediately and funds taken right away
  4. CPAs don’t transfer automatically and companies can try to take payment from a card they no longer have, which negatively impacts your credit rating
  5. CPAs are hard to cancel

Does a credit card debt go away?

Creditors may write a debt off as bad or uncollectable debt for their own financial records, but they will still pursue it. In most cases, the debtor still needs to repay the debt. However, The Limitations Act makes debts unenforceable if they have been dormant for six years.  Dormant means that the debtor hasn’t made a payment or admitted to the creditor that they owe the money.

The creditor must not have obtained a County Court Judgement (CCJ) to recover the debt – and this is highly unlikely over 6 years. This is more a technicality and not best practice.

Am I liable for my spouse’s credit card debt?

No, unless you have acted as a guarantor for their loan or unless you jointly own the debt. 

If you have any joint financing, such as a joint mortgage or joint bank account, one partner’s credit rating can be impacted if the other partner defaults on their loans.

Can credit card debt follow you overseas?

Your credit history probably won’t move with you if you move overseas, however your debts will remain outstanding and will be considered still active. It might make it harder for lenders to pursue the debt, but not impossible. And they may take legal action against you if required. If you move back from abroad, your debts will still be considered active and pursue County Court Judgements will still stand. Debt collectors can also, legally, try to recover the debt from assets in the country of original debt. Debt owed to the HMRC is more likely to follow you abroad. 

How long till credit card debt is written off?

The limitation period dictates the length of time that a creditor has to begin court action. It also depends on the type of debt. In England, Wales and Northern Ireland, the limitation period for credit card debt is six years. Called the prescription period in Scotland, the time frame is five years for credit card debt. 

We offer Debt Consolidation Loans for homeowners.

Our team is on hand to help with number of questions you may have.

If you are struggling with debt, please visit Money Advice Service for help and advice.

We are a broker, not a lender.

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