Q. We want to refinance $ 14,000 in credit card debt. How can we do that?

– drown in it

A. Congratulations on your journey towards liberation Credit card debt.

How you consolidate your debt depends on your total debt, creditworthiness, and other factors such as your payment history.

Consolidate your credit card debt works when the new debt has a lower APR than your current debt, said Betty Thomas, a chartered financial consultant and certified financial planner with Peapack Private Wealth Management in New Providence.

The move could lower your interest costs, make payments more manageable, and potentially reduce the payback period, she said.

One option to consider is a Debt consolidation loan, also known as personal loan. It is an opportunity to consolidate the entire amount of credit card debt into one loan, Thomas said.

“You would have a fixed monthly payment based on the Interest rate and term of the loan “, She said. “At the end of the loan period, the debt would be paid off. That would save money on interest costs. “

Thomas said the average interest rate on credit cards is around 16%, so the interest rate on a consolidation loan should be lower.

It is important to know that the lender can determine the interest rate based on the term of the loan you are applying for and your creditworthiness. So it is important to know your creditworthiness, she said. The better your credit rating, the better the interest rates offered to you.

You can check your results once a year for free at AnnualCreditReport.com.

Another option is to transfer funds to a credit card, which is a introductory 0% APR.

“These offers are usually short-term, e. B. 6 to 18 months, and fees may apply to transfer the balance, ”said Thomas. “When you transfer your debt to a 0% card, you have the option of paying off the debt without interest.”

When transferring debt, keep in mind that you can only transfer up to the credit limit offered by the card, she said. If the credit limit is insufficient to cover the amount you want to refinance, then you need to look for other options for the remaining credit card balance.

“The caveat about these offers is that if you can’t pay the balance within the introductory period, the accrued interest will be due and the balance will be subject to a higher interest rate,” she said. “Again, you should have good or excellent creditworthiness when researching this type of listing.”

Email your questions to [email protected].

Karin Price Müller writes the Bamboo led Column for NJ Advance Media and is the founder of NJMoneyHelp.com. Follow NJMoneyHelp on Twitter @NJMoneyHelp. Find NJMoneyHelp on Facebook. Sign up for NJMoneyHelp.com‘S weekly e-newsletter.