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It’s a problem most people face at some point: You’re carrying balances on multiple credit cards, or loans and it’s difficult to keep track of due dates or pay more than the minimum. You’re racking up interest charges and feel like you’ll never pay off those balances. What can you do? Make a plan to manage your debt — and consider consolidation as a tool to help you do it.

Make Your Plan

Developing a basic plan for paying off debt starts with three simple steps:

  1. Write down what you owe, your minimum monthly payments, and the interest rates. You don’t need to include planned, long-term loans such as your mortgage, student, or auto loans.
  2. Determine how much you can realistically pay toward your debt each month: Take your income and subtract your financial obligations, including household bills, savings, food, etc., as well as the minimum payments for your credit accounts. The amount left is what you can spend on paying down your debt.
    • If you have nothing left, look for ways to cut everyday expenses to come up with a little extra
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  3. Apply that money to your balances. You can use the “snowball” approach, focusing on your highest interest rate card first. Once that balance is gone, apply the money to the next highest-rate card and so on until you’re debt free.

Another approach is to consolidate all your balances into a single, lower-rate account.

Understanding Debt Consolidation

With debt consolidation, you end up with one balance, one bill, and one monthly payment. That simplifies recordkeeping and makes it easier to pay on time. It may also help reduce your monthly payment amount and could save you money on interest charges over the long run.

Find the right debt consolidation plan

Here are three common ways to consolidate debt:

  1. Transfer balances to a single credit card. This can be a particularly good option for moderate debts. Look for low rates and special balance transfer offers. For instance, the KeyBank Latitude® credit card has a special low introductory APR of 0% for the first 15 billing cycles on purchases and balance transfers (made within 60 days of account opening)1.
  2. Take out a personal loan. This may be good choice for larger debts. It gives you a fixed interest rate, a fixed monthly payment, and a specific time line for paying off your balance. Since the loan amount is only what you need to pay off your debt, it also helps prevent the temptation of running up more debt. Key has an Unsecured Personal Loan with rates and benefits that may work for you.
  3. Use your home’s equity. If you have available equity in your home, you may be able to borrow against it to consolidate your debt. A Home Equity Line of Credit typically has lower rates than most credit cards, and you can choose principal and interest or interest only payment options.

Keep Moving Forward

Whichever method you choose, stick to your plan until your debt is gone. Then make sure you don’t let fall into old habits. Consider taking the money you were using to make debt payments and put it into an emergency savings fund. That can be your go-to source, instead of credit cards, when unexpected expenses arise. And stick to a budget that ensures you spend less than you make — so you can keep moving forward in good financial health.


“Making a Plan to Get Out of Debt,” LaToya Irby, The, posted Sept. 18, 2016,, accessed Jan. 25, 2017

1 The 0% introductory APR does not apply to cash advances and is valid for the first 15 billing cycles on purchases and balances transfers. Thereafter, the APR may vary. Currently, the undiscounted variable APR for Purchases and Balance Transfers is 11.99% - 21.99% (depending on your credit worthiness). Balance transfers must be made within 60 days of account opening for introductory APR to apply. The variable APR for Cash Advances is 25.99%. Cash Advance fee: 4%, $10 minimum. Convenience Check fee: 3%, $10 minimum. Cash Equivalent fee: 4%, $10 minimum. Balance Transfer fee: 3%, $10 minimum. There is a $.50 minimum finance charge where interest is due. Overdraft Protection Transfer fee: $10. Foreign Transaction fee: 3% of the amount of each foreign transaction after its conversion into U.S. Dollars. Transactions originating in Canada are excluded from this fee. The creditor and issuer of the Latitude Mastercard credit card is KeyBank N.A., pursuant to a license from Mastercard International Incorporated. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated. Variable rates after introductory period as of 9/27/2018, based on credit worthiness.

This information and recommendations contained herein is compiled from sources deemed reliable, but is not represented to be accurate or complete. In providing this information, neither KeyBank nor its affiliates are acting as your agent or is offering any tax, accounting, or legal advice.

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