Statistics have shown that millions of Americans carry more than two credit cards with an average balance of around $4,453. Splitting the credit card dues, be it Visa or MasterCard, may increase the opportunities of availing of reward points. However, failure to clear off the debts on a timely basis may lead to several bad debts.

To avoid being submerged in bad debts or pay double-digit interests on multiple credit cards, it is recommended that the cardholders consolidate their debts on credit cards and pay off the debts with a single source.

Given below are four ways in which one can consolidate debts:

Apply for balance transfer credit cards:  On the successful payment of balance during the introductory period, the cardholder may benefit from paying less or no interest. Additional rewards and other benefits are also applicable depending on the plan chosen. However, failure to pay the balance during the introductory period may lead to deferred interest. It is also necessary for the cardholder to have an excellent credit score to benefit from the best balance transfer deals available. This will further help the cardholder to consolidate debts efficiently.

Get a personal loan:  The interest rate of a personal loan is considerably less as compared to the interest rate of a credit card. Moreover,  in the case of a personal loan, the period of payment may be extended for a longer term. The borrower’s credit score won’t be affected, and he or she will be entitled to take multiple loans. However, it is important to note that a low credit score—typically below 600—may attract high interest rates.

Borrow from a retirement account: Although this option should be considered as a last resort, it is one of the ways in which one can consolidate their debts. When an amount is borrowed, a fixed amount is deducted from the borrower’s account when the payment is due, making it easier for the borrower to pay off their debts. The lack of credit check makes this option accessible for individuals with low or bad credit scores as well.

However, one should know that during the period of the loan taken from the retirement account, the person will not be able to quit his/her job, as it will incur penalties in the form of interests.

Avail  a home or car equity loan:  Equity loans have a fixed amount and give a longer, but a fixed term, to repay the loan. These loans also have a fixed low-interest rate compared to credit cards. However, it is imperative to note that the borrower’s home or car is held as a collateral. Hence, he/she is at the risk of losing their assets if they fail to repay the loan.