Why Debt Consolidation Matters in 2023

A man sitting on a building rooftop at night

Debt consolidation is a simple way to address the complicated problem of carrying burdensome debt on your credit cards. We know it can be tough to dig yourself out of high-interest debt — and you are not alone. Right now, more and more Americans are carrying credit card debt month to month than ever before: a full 35 percent of you are rolling balances over each month, a 6 percent increase from 2022.

That same survey also pointed out that 43 percent of credit card holders don’t know the interest rate they’re being charged on their debt, either — which can prove to be a very expensive mistake, especially when the average credit card interest rate is above 20 percent.

Paying Credit Card Minimums Is a Trap (an Expensive One)

Simply put, each day that you carry your debt on those high-interest credit cards is costing you thousands more in interest across the lifetime of that debt. And if you’re just paying minimums, there is literally no end in sight. In the example below, you can see that paying just minimums on $10,000 debt leads to paying more in interest than you paid for your original purchases.

Debt Interest Rate Minimum Payment Months to Pay Off Total Interest Paid
$10,000 20.0% $200/month 109 (9 years!) $11,680

How Debt Consolidation Saves You Money

Debt consolidation is a three-step process:

  • Take out a new loan.
  • Use the loan to pay off all your debts.
  • Pay off the new loan with a single monthly payment.

There are many benefits to a debt consolidation loan, one of the biggest being that you know exactly how many months it will take for you to pay off your loan. Here are some other benefits:

  • Merges all of your debt into a single loan.
  • Gives you funds to pay off all your creditors and free yourself of high-interest-rate debt.
  • Provides a fixed payment that will never change: no interest rate increases, no matter what’s happening in the market.
  • The interest rate on your loan ideally will be lower than your current monthly minimums.
  • Can provide payment relief, with a smaller monthly payment than your minimums, depending on the term of your loan. (Longer-held loans have smaller monthly payments.)
  • Has a definite term (endpoint), so you know exactly when you will be finished paying off your debts.

The interest rate you qualify for on your debt consolidation loan depends on a few factors: your credit score and your debt-to-income ratio, meaning how much of your income will have to go toward servicing the new loan.

And, it’s important to note that debt consolidation loans will not help you if you find yourself acquiring new credit cards and racking up new, additional debt on them. Paying down debt takes focus and commitment, but the rewards — financial freedom, the ability to save and prepare for life’s many little emergencies — are worth the sacrifice.


At Patriot Funding, we believe you are more than your credit score — and we are ready to work with you to free you from high-interest credit card debt.

Stop juggling competing bills and end the cycle of paying minimums that gets you nowhere. Instead, consolidate your debts and pay one single bill monthly, at a lower interest rate.