Here we discuss what is credit card refinancing? And also about debt financing and the difference between credit card refinancing and debt consolidation. Where we will learn about how can you refinance my credit card debt? And mention some best credit card refinancing loans for reference.
What is credit card refinancing?
Credit card refinancing is referred to as the process of moving high-interest credit card debt to another credit card, which offers you a low-interest rate. By shifting to a lower interest rate credit card you can save your money on interest.
There exist 5 ways to shift your credit card balance as:
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- Balance credit card transfers
- Nonprofit debt consolidation through a debt management plan
- Debt consolidation loan from a bank, credit union, or online lender
- A loan from a 401k plan
- Home equity loan
Although, your credit score has a major role to play in your balance transfer, as a low credit score won’t qualify for balance transfer credit cards.
What is the difference between credit card refinancing and debt consolidation?
Both Credit card refinancing and debt consolidation are similar in nature as both deal with paying off the debts and lowering the interest rate. Where credit card refinancing is done by negotiating with the credit card company and choosing a credit card with lower interest rates to afford the credit payments. Whereas, Debt consolidation involves transferring all your debts into one loan by taking a single personal loan from the banks. As credit card companies charge a high interest rate as compared to personal loans.
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How can I refinance my credit card debt?
In order to refinance credit cards debt, you can choose any one of the following to refinance credit cards option as:
- Perform a Balance Transfer
- Consolidate with a Home Equity Loan.
- Take Out a Personal Consolidation Loan.
- Leverage Your Retirement Account.
- Find a Debt Management Plan.
- Settle Your Debts.
- Get a Cash-Out Auto Refinance Loan.
- Borrow Against Your Life Insurance
Best credit card refinancing loans
Here, we mention some best credit card refinancing loans that offer lower interest rates for paying off credit card debt.
| Lender | Est. APR | Min. Credit Score |
| Payoff | 5.99 – 24.99 % | 640 |
| Upgrade | 7.99 – 35.97 % | 580 |
| LightStream | 3.99 – 16.99 % | 660 |
| Marcus by Goldman Sachs | 6.99 – 19.99 % | 680 |
| FreedomPlus | 7.99 – 29.99 % | 620 |
| Upstart | 6.16 – 35.99 % | 600 |
| LendingClub | 10.68 – 35.89 % | 600 |
| Discover® Personal Loans | 6.99 – 24.99 % | 660 |
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Frequently Asked Questions:
What does credit card refinancing mean?
The credit card refinancing meaning is stated as the process of moving high-interest credit card debt to the one having a lower interest rate card. As by shifting to a lower interest rate credit card you can save your money on interest.
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What is the difference between credit card refinancing and debt consolidation?
Both Credit card refinancing and debt consolidation are similar in nature as both deal with paying off the debts and lowering the interest rate. Where credit card refinancing is done by negotiating with the credit card company and choosing a credit card with lower interest rates as to afford the credit payments. Whereas, the Debt consolidation involves transferring all your debts into one loan by taking a single personal loan from the banks. Credit card companies charge a high interest rate as compared to a personal loan.
Is consolidating credit cards bad for your credit?
By choosing Debt consolidation you can hurt your credit score as credit score depends upon the repayment method. Although, there is no strategy to increase your credit score. But, eliminating the debts as well as lowering the amount of debt can have a good impact on the credit score.
How can I refinance my credit card debt?
In order to refinance credit cards debt, you can choose any one of the following to refinance credit cards option as:
- Perform a Balance Transfer
- Consolidate with a Home Equity Loan.
- Take Out a Personal Consolidation Loan.
- Leverage Your Retirement Account.
- Find a Debt Management Plan.
- Settle Your Debts.
- Get a Cash-Out Auto Refinance Loan.
- Borrow Against Your Life Insurance
Is It Good To Refinance Credit Card Debt?
Credit card refinancing or debt consolidation can hurt your credit score in the short term, but will help in the long run, but only if you make on-time payments. Applying for another credit card usually lowers your credit score by a few points. The average age of your credit cards is a factor, too.
Does Refinancing Your Credit Card Hurt Your Credit Score?
Refinancing will hurt your credit score a bit initially, but might actually help in the long run. Refinancing can significantly lower your debt amount and/or your monthly payment, and lenders like to see both of those. Your score will typically dip a few points, but it can bounce back within a few months.
Conclusion:
Thus, by now you know what is credit card refinancing? And also about debt financing and the difference between credit card refinancing and debt consolidation. Where we learned about how can you refinance your credit card debt? with some best credit card refinancing loans. So we successfully explained what is credit card refinancing?