September 26, 2025
Finding a reputable lender to consolidate credit card debt
Dear Consumer Ed:
I have several credit cards, all with high utilization rates (80 to 90 percent of my available credit). However, I have never been late with a payment, and all other areas of my credit are very good or excellent. How can I find a reputable institution or lender to help me consolidate my debt?
Consumer Ed says:
If your other credit factors are strong, you can certainly find a reputable institution or lender to help you consolidate your debt, even with high credit card utilization. Here are some tips for finding a reputable lender:
- Consider starting with your bank or credit union. Georgia banks and credit unions often offer debt consolidation loans with lower interest rates than credit cards. You may be able to pre-qualify for loans online and compare offers without hurting your credit score.
- Make sure to compare the different interest rates, fees, and contract terms to find the consolidation loan plan that works best for you. Although some lenders charge loan fees, not all of them do. You may save money by choosing a lender that does not impose a fee. To get a real “apples-to-apples” comparison of your loan options, compare the APRs (annual percentage rates) of each loan. The APR shows the true cost of the loan by representing both interest and any loan fees.
- Avoid any unlicensed lender. You can verify that a lender is licensed to operate in Georgia through the Georgia Department of Banking and Finance's Nationwide Multistate Licensing System (NMLS) Portal at nmlsconsumeraccess.org.
- Consider contacting a nonprofit credit counseling agency, such as the National Foundation for Credit Counseling (nfcc.org), which will connect you with certified counselors who will work with you to create a debt management plan, helping you reach your financial goals without having to take out a loan.
- Steer clear of anyone who offers “debt settlement” services. Debt settlement involves a business negotiating with your creditors to reduce the amount of debt you owe. These businesses often advise consumers to stop making payments to their creditors until a negotiated settlement has been reached, and to instead make payments to the debt settlement company. This scenario is not only illegal in the State of Georgia, it may also end up worsening a consumer’s money problems. The only debt adjustment model that is legal in Georgia is the one outlined in the Georgia Debt Adjustment Act, where the debtor sends money directly to the debt adjustment company, which places the funds in a trust account and then disburses the money to the debtor's creditors after taking a percentage of not more than 7.5 percent off the top as its fee. In addition, the debt adjustment company must disburse all funds received from the debtor, less any fees, to creditors within 30 days of receiving them.
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