Warning! Read This Before Consolidating Your Credit Cards

Whitney Sparks "A Fearless Heart"

People often come to Greg and I to ask if they should consolidate their credit cards.  So, I thought that I would share our experience with debt consolidation and then let you come to your own conclusion.  Keep reading because what I have to say might just change your mind before you decide to consolidate.


means that you are taking out one loan to pay off all the others that you have accumulated.  Usually people decide to consolidate their debt to achieve a lower interest rate, secure a fixed rate, or be able to service only one loan.



Our story is like many others.  At the time I didn’t realize that.  I thought that Greg and I were the only people on the planet struggling to pay our credit cards.


I was still in college and working part-time at a local library.  Greg had a full-time job but was unemployed when we were first married.   So, we were just barely getting on our feet.


We have never missed a credit card payment, but that’s mostly because we chose not to eat.  When you’re paying $450+/month for credit cards on a full-time/part-time income then it’s hard to keep your head afloat.

Back in the day when we were newly married we were just trying to survive.  So, we opted for debt consolidation to help us at least feel like we were accomplishing something in our financial life.

I can’t tell you what made us decide to consolidate our debt other than pure desperation, and the fact that we were tired of asking our parents for money.  It makes you feel horrible to borrow money from people that you know don’t have a lot of extra to spare.

So, when we received a phone call where they were telling us they could help get us out of debt in 5 years that sounded really good, at the time.  It also sounded nice to hear that we would only receive one bill and not have to pay 2 separate credit card bills.

This is why debt consolidation looked so good.  Let me show you how much we paid for us to combine those balances and have a “lower interest rate”.

CREDIT CARD #1 = $16, 242.64 (amount owed)

CREDIT CARD #2 = $9, 629.09 (amount owed)

SUBTOTAL = $25,871.73

DEBT CONSOLIDATION PROGRAM = $38 service charge per month

MULTIPLY $38 by 63 months = $2, 394.00

(we were on a 5-year-plan, but it took us 3 extra months to pay it off)

GRAND TOTAL = $28, 265.73


I would not have thrown our hard-earned money down the drain.  See, this only sounds like a better deal.  What they failed to tell us is that the lower interest rate comes from extending the loan to X amount of years.

Also, consolidating our debts did not help us change our habits in any way.  We still accrued a lot more debt ($53,000 to be exact) over the next couple of years.  This amount did include the credit cards but since we didn’t learn how to actually manage our money, the debt amount kept going up.

I just wish that we would have done more research.  We thought this 5-year-plan sounded amazing.  My husband had those credit cards since college, but we wound up paying on them until 2007.

I wish that I could have met someone to give us a swift kick in the behind and motivate us to get out of that debt before buying a house and having children.  Fortunately, God did put a man in our life that told us exactly what we were doing wrong.

He told us that if we were going to focus on debt then we needed to find some extra money.  Our family told us this also but the difference with this friend was that he gave us a plan to follow.

He suggested that we stop paying retirement which opened up an extra $65 a month.  Once we started managing our money and budgeting, that $65 turned into an extra $1,000 a month.  How?  We paid down debt and used the money we were spending on minimum payments to pay on the next debt.


It took us 3 years to pay down the remainder of the debt.


The cool part of this story is that this man is still in our lives.  He is a financial advisor.  He isn’t telling us how to pay down debt anymore, but he is telling us how to plan for our future.  It’s funny how your life seems to make a full circle sometimes.

Have you entered into a debt consolidation program?  If so, please feel free to share your story.

One Comment on “Warning! Read This Before Consolidating Your Credit Cards”

  1. Would you mind sharing how you were helped to find that extra $65, that turned into $1000 per month? Thank you 🙂

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