Credit card refinancing: What is it?

Credit card refinancing is a debt-payment strategy for paying off credit card debt using another credit card or a personal loan with a lower interest rate. 

The general idea is to reduce interest payments to help pay down debt.

What you’ll learn:

• Credit card refinancing involves paying off a credit card balance using another card or a personal loan. 

• Benefits of refinancing include saving money on interest and—if the refinancing involves consolidating debt on more than one card—streamlining monthly payments.

• One way to refinance credit card debt is through a credit card promotional interest rate or a balance transfer. 

• It’s important to remember that refinancing won’t eliminate the debt you owe.

Credit card refinancing is the process of paying off a credit card balance using another credit card or a personal loan. People often refinance credit card debt to save money on interest costs and simplify payments.

One way to refinance credit card debt is through a credit card promotional interest rate or a balance transfer. Reducing your interest rate temporarily could help save money and allow your monthly payments to go toward paying off the card account’s principal balance instead. 

If refinancing involves consolidating multiple credit card debts, it might also mean fewer payments to manage.

It’s important to remember that refinancing won’t eliminate what you owe. There may be fees if you’re transferring a balance from one card to another. And remember that promotional interest rates don’t last forever. 

If you’re applying for a new credit card or loan, you can learn more about how applying and opening a new account could affect your credit scores.

Credit card refinancing might be a good option if you:

• Want to get better terms on credit card debt

• Qualify for a 0% introductory APR

• Can pay off your balance before the introductory period ends

• Qualify for a balance transfer offer

• Can lower your monthly payment

Credit card refinancing usually involves taking out a lower-interest credit card or personal loan to pay off your balance on an existing credit card. Paying off the new balance over time can reduce interest costs and simplify your monthly payments.

You can compare credit cards from Capital One to see if any fit your financial goals. You can also find out whether you’re pre-approved before applying. It’s quick and it won’t hurt your credit scores.