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Debt Consolidation

Year-End Money Check: Should You Consolidate Credit Cards and Loans Now?

Written by Anna Baluch
Finance Writer
October 28, 2025 | 6 min read
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As 2025 winds down, it’s the perfect moment to take a hard look at your finances and prepare for the year ahead. End-of-year planning isn’t just about tracking down taxes or making last-minute investments—it’s also a chance to simplify your debt, free up cash flow, and enter 2026 in a stronger position.

For example, if you’re trying to manage multiple credit cards and loans, you might want to consolidate your debt before the year's end. This way, you can streamline the payoff process and have more money available to save, invest, and/or build long-term financial stability.

Why the end of the year is the perfect time for a financial review

A year-end review has clear advantages. Here’s why this time of year matters:

  • Tax planning opportunities: Reviewing your finances before December 31 helps you maximize deductions, reduce taxable income, and make smarter retirement contributions before filing it’s time to file in late January.
  • Holiday spending season: Americans spend an average of $900+ during the holidays, per the National Retail Federation. If you’re feeling financially stretched, you might consider consolidation to help restructure your budget before travel, gifts, and year-end celebrations add to your debt.
  • Fresh start for 2026: An end-of-year audit enables you to enter the new year with fewer financial loose ends and more confidence in your budget. It’s easier to start strong when you’ve already addressed high-interest debt.

Why high-earning professionals are choosing to consolidate before year-end?

High earners aren’t immune to financial strain. High interest rates and elevated living costs are likely here to stay, prompting many high earners to explore consolidation as a way to stay ahead of the curve.

The reality is that inflation, which is largely beyond your control, can make it more difficult to maintain or improve your lifestyle. If rising costs of groceries, childcare, homeownership, medical bills, and just about everything in between are impacting your spending, now may be the ideal time to restructure your budget.

 

High APRs and inflation make carrying debt risky

The average credit card APR was 21.16% in May 2025, one of the highest on record, according to recent data from the Federal Reserve. Experts predict rates will remain elevated well into 2026, which means carrying balances month to month could remain costly.

 

Lenders like BHG offer professional-grade solutions 

While many financial institutions offer debt consolidation solutions, it’s essential to work with a lender that provides competitive interest rates, flexible repayment options, and a tailored borrowing experience.

BHG Financial’s debt consolidation personal loans are designed for prime-credit professionals with complex finances. Loan amounts are as high as $250,0001 and offer industry-leading extended repayment terms of up to 10 years.1,2 Plus, you don’t have to put up collateral to secure the funds.

Should you consolidate credit cards or loans now? Here’s how to decide

Generally, paying down high-interest debt improves your credit profile for future borrowing and investment opportunities. But if you’re unsure whether now is the time to consolidate, here are a few signs it might be a smart move:

  • You’re juggling multiple balances and due dates: Consolidating debt simplifies your financial life into one predictable payment.
  • Your interest rates are creeping up with variable debt: Consolidating into a fixed-rate loan shields you from future hikes in 2026.
  • You have great credit, but your cash flow feels tight: A lower monthly payment can give you breathing room for year-end costs as well as new-year goals.

 

Debt consolidation is usually best if you meet the following criteria:

  • You have good to excellent credit (670+)
  • You’re carrying $20K+ in credit card or personal loan debt
  • Your minimum payments are starting to eat into savings

How consolidation can boost your financial position by year-end? 

 

Create a cash flow cushion 

High-interest credit cards and multiple loans can make monthly budgeting unpredictable. By consolidating, you replace fluctuating minimums with one fixed payment. This allows you to cover essential year-end expenses, like holiday spending or professional obligations, without incurring additional debt.

To identify potential cash flow gaps before December, track your consolidated loan payment alongside recurring expenses, such as your mortgage, utilities, and childcare. Then allocate extra funds toward savings or short-term goals.

 

Protect against rising interest rates

Variable-rate credit cards can spike unexpectedly, increasing your debt burden during the costly holiday season. A fixed-rate consolidation loan locks in your interest rate, shielding you from unexpected hikes.

After consolidating, set up automatic payments for your new loan and review your budget to ensure you're on track. Consider creating a short-term plan to address any remaining high-interest balances and avoid accumulating new debt.

 

Position yourself for a stronger financial start in 2026

While consolidation can help save money, it can also help you prioritize your long-term financial health:

  • Paying down debt more efficiently can improve your credit utilization ratio, which may boost your credit score.
  • Simplified payments reduce mental load and financial stress, making it easier to focus on retirement contributions, investment planning, or other 2026 financial goals.
  • Freed-up cash flow can allow for pre-tax contributions to retirement accounts or other tax-advantaged opportunities before December 31.

How BHG Financial can help you consolidate before year-end

Not all debt consolidation loans are created equally. The BHG Financial personal loan is specifically designed for high-earning professionals:

  • Large loan amounts and long terms: Borrow up to $250,0001 with repayment terms as long as 10 years1,2—no collateral required.
  • Tailored experience: Work directly with a U.S.-based loan specialist who understands professional cash flow challenges.
  • Credit-safe application: Check your rate with no impact on your credit.3

Final thoughts: Close out 2025 with control and clarity

Year-end is the natural checkpoint for reviewing your finances. Even in an elevated rate environment, now is the ideal time to consolidate and streamline. By taking action before December 31, you’ll set yourself up with less stress, more stability, and a stronger foundation for 2026.

You can check your rate today with no impact to your credit3—and head into the new year with confidence.

* BHG monthly payment based on BHG’s minimum available APR for a 10-year term, which is 14.63% as of 07.01.25 and includes an origination fee. Your actual loan size, loan term, and monthly payment amount may vary based on your individual credit profile and other information provided in your loan application. Terms subject to credit approval.

 

Not all solutions, loan amounts, rates or terms are available in all states.

1 Terms subject to credit approval upon completion of an application. Loan sizes, interest rates, and loan terms vary based on the applicant's credit profile.

2 Personal Loan Repayment Example: A $59,755 personal loan with a 7-year term and an APR of 17.2% would require 84 monthly payments of $1,228.

3  There is no impact on your credit for applying. For personal loans, a complete credit history, which will appear as an inquiry on your credit report, will be performed upon acceptance and funding of the loan and may impact your credit.

No application fees, commitment, or impact on personal credit to estimate your payment. 

Consumer loans funded by Pinnacle Bank, a Tennessee bank, or County Bank. Equal Housing Lenders. 

For California Residents: BHG Financial loans made or arranged pursuant to California Financing Law license - Number 603G493.

 

 

 

If you’re feeling weighed down by credit card debt, you’re not alone. High interest rates can feel like an uphill battle, making it easy to fall behind and tough to catch up. 

Understanding how to pay off credit card debt is the first step toward taking control of your debt and reclaiming your financial well-being. Here are a few practical strategies to eliminate credit card debt.

 

Key considerations

  • If you have a significant amount of high-interest debt and a good credit score, a debt consolidation loan can be a viable option for paying off credit card debt. For smaller debts, a balance transfer card could help you tackle debt faster.
  • If not consolidating or using a balance transfer card, set a goal and a budget for repayment; targeting one debt at a time using the snowball or avalanche method can help reduce your balances methodically.
  • Gradually exceed monthly minimum payments whenever possible to decrease your total interest over time. Even small extra payments can make a big difference in your credit card debt over the long term.

 

Why is credit card debt hard to pay off?

U.S. credit card balances have surpassed $1.21 trillion, according to the Federal Reserve, driven partially by high APRs.

Credit card debt is difficult to overcome. Even if you don’t make additional purchases, the interest compounds. Only paying the minimum each month means you will carry the debt from month to month, increasing your debt as you accumulate interest charges.

For example, if you’ve amassed $50,000 in credit card debt on a card with a 23% APR, you could pay up to $11,500 per year in interest. Without a plan in place to address the debt proactively, it can become a significant burden. 

To start, pay as much as you can toward the debt. Some common ways to do this effectively and consistently include using the debt snowball or debt avalanche method. 

 

What is the debt snowball method?

If you have balances on multiple cards, one of the best strategies to eliminate credit card debt is the snowball method. With the debt snowball method, you pay off the card with the smallest balance first before moving on to the next largest one.

This method is a good choice if you can’t afford to make large monthly payments but want to proactively chip away at your debt. Once you pay off a card, you'll redirect the funds you were using for that payment to your next card balance. You'll continue to do this until you’ve tackled each debt.

Here’s how it looks in action, using the following credit card balances as an example:
 

  • Credit card 1: A $5,500 balance and an APR of 16%
  • Credit card 2: A $2,000 balance and an APR of 20%
  • Credit card 3: A $10,000 balance and an APR of 23%

 

Using the snowball method, you’d focus on the second card on this list first because it has the lowest balance ($2,000). Once cleared, you’d move on to the next highest card balance ($5,500) before addressing the third card with a $10,000 balance. 

Remember to make minimum payments on all other cards in the meantime; missing any minimum payment can hurt your credit score.

 

What is the debt avalanche method?

Attacking debt using the debt avalanche method involves paying off the account with the highest interest rate first, regardless of the balance. It can take a while to make progress on —especially if the balance on that card is excessive—but you’ll save money on interest in the long run. 

The avalanche method may be a better strategy for you if you can confidently afford a bigger payment and want to pay less in interest while you work to become debt-free. 

Here’s how debt avalanche looks in action, using the same credit card balances from above as an example:
 

  • Credit card 1: A $5,500 balance and an APR of 16%
  • Credit card 2: A $2,000 balance and an APR of 20%
  • Credit card 3: A $10,000 balance and an APR of 23%

 

Using the avalanche method, you’d tackle the third card first because it has the highest APR (23%). You’d focus on the second card next—APR of 20%—even though it has a lower balance, before moving on to the first card with the lowest APR. 

Again, it’s important to focus on making every payment on time to protect your credit score and avoid tacking on additional late fees. It can take a while to knock out the first debt, so patience and consistency is key.

 

How can debt consolidation help? 

Consolidating personal credit card debt FAQs

Consolidating personal credit card debt can simplify your finances by combining multiple debts into a single monthly payment with more manageable interest rates. In the long run, this can save you from spending more money than you anticipated or previously agreed to on in-terest payments in the future.

Personal debt consolidation can impact your credit score differently depending on the method chosen. For example, applying for a new loan or credit card for consolidation may result in a temporary dip in your credit score due to inquiries, changes in credit utilization, and your his-tory using credit-based financial products. However, making timely payments on the consoli-dated debt can positively affect your credit score by demonstrating responsible financial man-agement.**

Yes, personal debt consolidation can be applied to various types of debt, including personal loans, medical bills, and student loans, in addition to credit card debt. Consolidating multiple debts into a single payment can streamline your repayment process and make it easier to man-age your finances overall.

With highly specialized financing options for accomplished professionals, BHG Financial offers personal loans up to $200K1 to use as you need them. With repayment terms that last up to 10 years,1,2 you can fully bring your financial plan to action by consolidating your personal debts into a simple and affordable monthly payment to help you achieve financial peace of mind sooner rather than later.

Our payment estimator can help you see your personalized estimate quickly, and our dedicated concierge service team can serve your needs every step of the way.

 

Debt consolidation involves combining multiple credit card debts into one new account or loan and using it to pay off your existing debts. In many cases, consolidation can save you money because the new product may come with a lower interest rate than the ones attached to your cards. Consolidating debt also simplifies the repayment process because you only need to manage one monthly payment.

Some of the most effective credit card consolidation strategies include using a debt consolidation loan or a balance transfer credit card. The best way to pay off credit card debt will depend on the amount of debt you have, your credit history, and your income level.

If you have a significant amount of high-interest debt and a respectable credit score, a lower-rate personal loan for debt consolidation can be a viable option. Debt consolidation loans, like the ones offered by BHG Financial, have flexible repayment terms1 that help keep your monthly payments low.

 

Do balance transfers help pay off debt faster?

Transferring your balance from one credit card to another can help you pay your debt faster, as long as the new card comes with a lower rate. If you transfer your balances to a new card with a lower APR, you can allocate a greater portion of your future payments to paying down the principal instead of the interest.

That said, there are a few things to know about the timing of balance transfer credit cards:

  • You can apply for a balance transfer card in a matter of minutes, but the actual transfer can take anywhere from a few days to several weeks, depending on the credit card company. During that time, you’ll still have to make any payments you owe to your original card company.
  • Make sure you understand how long the introductory rate lasts, whether there’s a transfer fee, and what the regular rate will be after the promotional period. Introductory rates typically run for a period of six to 18 months, and if you can’t pay off your balance in full, the new rate may be higher than the rate on your old card. 

If you worry it may take longer than the intro period to pay off your debt, consider transferring your balance to a debt consolidation loan. BHG offers fixed, affordable payments with terms up to 10 years.1,2 Plus, dedicated loan specialists provide a concierge loan experience, guiding you through the loan process. 

 

 

Balance transfer vs personal loan chart


Source: Bankrate, Investopedia - Accessed on 3/14/25
1 Terms subject to credit approval upon completion of an application. Loan sizes, interest rates, and loan terms vary based on the applicant's credit profile.

 

How to pay off credit card debt FAQ

 

Should I pay off my credit card debt or save first?

It usually makes sense to pay off your debts before saving money, especially if you have high-interest debt. This is because the high interest rates on your accounts will often cost more than the money you can save. For this reason, any money you can afford to save is better allocated to paying off your high-interest debt so that it doesn’t continue to compound. 

 

How can negotiating with creditors reduce my debt?

If card issuers are willing to consider negotiating your credit card debt, you may be able to set up a payment plan, pay off the cards for less than what you owe, or agree to a forbearance. However, there are definite drawbacks to negotiation, as these solutions negatively impact your credit score.

 

Can I pay off credit card debt without hurting my credit score?

Absolutely! Any moves you make to pay your monthly balances on time can help build a solid payment history and, in turn, improve your credit score. Plus, reducing your credit card balances will lower your credit utilization ratio.

 

Are debt relief programs worth it?

Debt relief (debt settlement) programs offered by for-profit companies should be viewed as a last resort, and only after you’ve exhausted options for consolidation. Debt relief companies can fast-track getting out of debt, but they often charge high upfront fees, and the process could hurt your credit score. Watch for scams and make sure you understand the potential fees before handing over your finances to a debt relief company.

 

What if I can't afford minimum payments?

Many creditors are willing to work with you if you cannot afford to pay the monthly minimum payment. Call the company as soon as possible to see what you can work out. If getting a debt consolidation loan isn’t an option for securing a lower minimum payment, you can contact a credit counseling agency, which will help you organize a debt management plan to pay down your debts. Debt relief programs could be considered as a last resort, as they come with drawbacks and can charge exorbitant upfront fees.

 

How BHG can help you pay off debt faster

At BHG Financial, we believe financing should fit seamlessly into your life and goals. That’s why we offer personal loans tailored to your needs, with amounts up to $200,0001 and flexible terms of up to 10 years.1,2 Consolidate your high-interest debt with a BHG loan designed to help you move forward confidently. 
 
Plus, you’ll enjoy dedicated, U.S.-based concierge service that works around your schedule—because your time is valuable. Ready to see what’s possible? Use our quick and easy payment estimator to get your personalized loan estimate in just seconds.