Credit card refinancing is available in many forms, but they share the common goal of lowering your interest rate to make it easier to repay this kind of debt. Some of the most common ways to refinance credit card debt are personal loans, balance transfer cards, borrowing from your retirement account, and home equity loans. The right option will depend on your finances, the amount of debt you have, and your credit history.

Although paying off your credit card balance in full at the end of each month is important, life can get in the way. A total of 65% of American credit card holders do not pay off their balance in full, and 46% of those people say that it would take them over a year to pay off the balance in full.  

If you don’t want to damage your credit or make your debt situation worse, consider solutions that include refinancing options, like debt consolidation loans or debt settlement. Before you decide on the right solution to pay off your debt, it’s important to understand the pros and cons of each option. 

4 Options for Refinancing Credit Card Debt

There are several options available to refinance credit card debt. Options like balance transfer cards are available at a lower interest rate (even as low as 0%), but they are still considered revolving credit. 

Personal debt consolidation loans are also available at lower APRs, but they provide you with a fixed repayment structure and a specific timeframe to pay off your debt. The best option is the one that helps you save money and works effectively for your financial situation. 

1. Personal Loans

Personal loans may be a good option if you have a “fair” to “good” credit score of 680 or more. You can still qualify for a personal loan with a lower credit score, but the interest rate will be higher than it would be if your credit profile were in better shape. Since credit cards are unsecured debt, you won’t need to put up any collateral.

The application process for a personal loan is fairly easy and can be done online. Most financial institutions typically approve applications in one business day. You’ll need to pay your installment on time every month to keep your credit in good shape.

Personal Loan Pros:

  • Fixed interest rate and payment each month
  • An unsecured personal loan does not require collateral
  • Payments can be made electronically by autopay, directly out of your checking account, so you don’t miss any payments
  • Fixed time period to pay off your new loan

Personal Loan Cons:

  • Interest rates can be high if your average credit score is lower
  • Can increase your overall debt, if you're still using credit cards after refinancing
  • Prepayment fees and other loan fees your lender may charge can make the cost of borrowing higher than expected

2. Balance Transfer Cards

When you transfer your existing balance from high-interest credit cards to a balance transfer card, you can often qualify for a 0% interest rate on any transferred balances for a prespecified amount of time (usually 12-18 months). That means you won’t have to pay any interest on your balance while you’re making payments during this introductory period. Any payment you make during that introductory period will go entirely toward the principal, which helps you pay off the debt faster.

Typically, credit card companies offer an introductory period of 12 to 18 months, or even 24 months, on rare occasions. They might also charge a small 3%-5% fee that’s based on the amount you transfer, so it's important to account for that cost. Generally, you’ll need a clean credit profile and an average credit score of 720 or more to qualify for balance transfer cards.

Balance Transfer Pros:

  • 0% interest rate on transferred balances from another card, typically for an initial period of 12-18 months
  • Easy and quick to apply and qualify for
  • Offers the potential to save a lot on interest charges

Balance Transfer Cons:

  • The introductory period is only for a limited time, after which the standard APR for the credit card (currently about 24%) applies
  • Not available to those with bad credit
  • Balance transfer fees of 3%-5% charged by card issuers may increase the overall cost

3. Home Equity Loan

If you own a home and have built up enough equity, another option to refinance credit card debt is through a home equity loan. The loan amount will depend on the difference between the current market value of your home and the current balance due on your home’s mortgage loan.

Home equity loans come with fixed rates, while home equity lines of credit (HELOCs) are usually offered at variable rates that are tied to some kind of interest rate index, like the U.S. Prime Rate or LIBOR. Interest rates on Home Equity Loans and HELOCs tend to be quite low, in comparison to other loan alternatives, especially if your credit report is good and you have a history of repaying your mortgage.

HELOC/Home Equity Loan Pros:

  • Higher equity in your home may qualify you for a larger initial loan amount
  • Fixed interest rates and fixed monthly payments each month for Home Equity Loans
  • Lower interest rates than other loan alternatives


  • Closing costs may make borrowing more expensive
  • Risk of foreclosure on your home, if you miss payments

4. Borrowing From Your Retirement Account

You can also refinance your credit card debt by borrowing from your retirement account. You can take a loan against your 401(k) to pay off your credit card debt. This type of loan allows you to borrow money and then pay it back over time with interest. The funds you pay back are then deposited back into your retirement account.

It’s important to note a 401(k) loan is different from a 401(k) withdrawal (sometimes referred to as a distribution). If you make a withdrawal, the money is permanently removed from your retirement savings, and the amount you withdraw will be subject to ordinary income tax at the federal and state levels. 

If you’re under 59-½ when you make the withdrawal, an additional 10% early withdrawal penalty (in the form of additional income tax) may be due if the withdrawal does not qualify for one of the exemptions from this penalty that the IRS offers 401(k) owners. While the money is easily available, this should be your last option because you’ll miss out on potential growth in your investments.   

Retirement Account Loan Pros:

  • Easy and quick process
  • Lower interest rates than other loan alternatives
  • You pay interest on the loan to yourself, not a bank or credit union
  • Does not impact your credit scores because this kind of loan is not reported to your credit reports (because you are essentially just borrowing from yourself)

Retirement Account Loan Cons:

  • You’ll need to pay back the loan quickly if you leave your job
  • Your employer may not allow it
  • Reduces growth on investments
  • Any loan balances not repaid in full are counted as withdrawals and subject to income tax and possible early withdrawal penalties

When To Refinance Credit Card Debt

Refinancing may be a good option if:

  • You need help making minimum monthly payments. 
  • You carry a lot of credit card debt at a higher interest rate (25% or higher) 
  • You have a better ability to make on-time payments on the new loan or balance transfer credit card
  • You have a credit score that is high enough to qualify for a lower interest rate than what’s being charged on your credit cards now.

For example, borrowing through a credit card with a 24% APR may make it difficult to pay off your debt. If you transfer your debt to a personal loan with a 12% interest rate, you’ll save a considerable amount of money on interest charges and have an easier time clearing your debt. 

What To Consider Before Refinancing Your Credit Card Debt

Here are some of the factors to consider when choosing to refinance your credit card debt.

It may be a good idea for you to refinance your credit card debt if:

  • You can more easily make payments on the new loan each month.
  • You have a good to excellent average credit score with the three credit reporting bureaus (680+).
  • You have a plan in place to stay out of debt.

Refinancing may not be a good idea if:

  • You struggle to pay credit card bills on the due date.
  • You often exceed your credit limits.
  • Your average credit score is low (typically 620 or lower).
  • Your credit utilization ratio could be better.
  • You’re not sure if you’ll ever be able to pay off your debt.  

Even if refinancing is not suitable, there are many debt relief options to explore, such as debt settlement, debt consolidation, and debt management plans.

Should You Refinance Credit Card Debt for a Better Financial Future?

If you have accumulated a lot of credit card debt at a high interest rate, you may need help to pay off that balance in full each month. When you don't pay your entire balance off in full, the unpaid balance continues to accrue interest, and your balance keeps increasing.

If you make late payments or are only able to make the minimum payment, you’ll not only accumulate late fees, but you’ll also find that your debt can snowball quickly, becoming unmanageable. Taking concrete steps to tackle your unsecured debt by refinancing your credit card balances will help you save money on interest and give you the peace of mind you need.

Tips for Getting a Better Refinancing Deal

After considering all the pros and cons, if you think refinancing is the best option for you, it's important to compare lenders to find the lowest interest rate possible. Here are a few more tips to consider.

Refinance Credit Card Debt with a Reputable Lender

Think about the long-term implications of your financial decision before you choose to refinance your debt. Take the time to compare your options to ensure that you can afford the monthly payments.

Work with an experienced, reputable lender and ensure you don’t jump into something that seems too good to be true. If you have an account at a credit union or a local bank, start there. Get quotes from at least three lenders so you can compare loan terms and find the best credit card or loan that meets all your needs.

Refinance Credit Card Debt With No Fees

Balance transfer fees and prepayment penalties may increase the cost of borrowing and refinancing your credit card debt. In some cases, these extra fees may negate any benefit you get from refinancing. Research to find lenders that may offer balance transfers with no fees. You may have the opportunity to negotiate with a lender to remove certain fees, such as prepayment penalties. If you have a “good” to “excellent” credit score (of 680+), you may be in a better position to negotiate.

Risks of Refinancing Credit Card Debt

While there are plenty of benefits to refinancing your credit card debt, it's important to consider the risks so you can weigh your options and make an informed decision.

  • You may incur fees. Refinancing may come with certain costs, such as loan origination fees, balance transfer fees, and prepayment penalties.
  • You may increase your debt. Once you've successfully refinanced your credit card debts, if you continue to rack up charges on the accounts you just paid off, you may end up owing even more. Consider getting help with spending and money management through credit counseling if you want to avoid further debt.
  • You might lower your credit score. Lenders may perform a hard credit inquiry when reviewing a loan application. This credit check may lower your FICO credit score. Also, if you miss payments after refinancing, your credit can take a hit, which may make it difficult for you to recover.

Can I Refinance With Credit Card Debt?

If you have existing debt on your credit cards, you may still have the chance to refinance depending on several factors, such as your credit score and repayment history. If you have a significant balance but have managed to make payments on a timely basis, your credit score may still be good enough to qualify for a refinance loan at a lower interest rate.

However, if you've already missed credit card payments multiple times and your credit score is quite low, you may have to consider other debt relief solutions, such as a Home Equity Loan, or even look at debt settlement. If you have multiple credit card accounts, opting for a credit card consolidation loan may be a good choice.

Refinance Your Credit Card Debt Today 

Refinancing your credit card debt means taking out a loan at a lower fixed interest rate or transferring your balance to a new credit card with a low (or 0%) introductory balance transfer offer to pay off your existing debt. Personal loans and 0% APR balance transfer cards are two popular ways to do that. Both of these options are good if you have a good credit score and are confident that you’ll be able to pay off the loan on time.

If you have too much debt and are wondering if you can pay off the entire balance, TurboDebt can help. TurboDebt can help you manage your debt through consultation, planning, and a variety of debt relief services. 

Our debt professionals can help you find the right debt relief option based on your financial situation. Connect with us today for a free consultation. Read our reviews to see how our debt relief services have helped thousands of clients.