With such loans, you consolidate several unsecured debts into one monthly payment that is less, with lower interest, than the payments on your current debts. One method is to transfer all credit card balances to a card with a lower interest rate. Some cards will retain their introductory rates for six to twelve months. Higher interest rates on transfers from other credit cards. Transferring debts from cards with higher rates is the main reason for consolidating them on a lower interest card.
Some cards limit the lower rates to new purchases.
These fees will offset some of the advantages gained by paying lower interest rates. There is a list of low-rate cards at Bank Rate Monitor's Web site. A home equity loan or credit line is another option. Home equity loans allow you to tap into the money you have invested in your house. Your local banks, credit unions, and finance companies also offer consolidation loans specifically designed for people to pay off bills.