An increasing number of Americans are turning to balance transfers and personal loans to consolidate and manage debt. It can save them money in the short term, but without a change in spending habits, that strategy is likely to fail, experts say.
“If they didn’t fix whatever issues were causing them to overspend and charge on the credit cards in the first place, then they’re just going to start charging again,” said Jim Triggs, CEO of Money Management International, a nonprofit credit counseling firm. “You can never borrow your way out of debt. Eventually, you’re gonna have to pay it and pay it off.”
Credit card balances reached a record $1.28 trillion at the end of 2025, according to the New York Fed. And many consumers are struggling with higher everyday expenses.
Here’s a look at more stories on how to manage, grow and protect your money for the years ahead.
Personal loans, which provide a lump sum of money and are typically repaid over two to five years, can be a smart way to consolidate high-interest debt. Rates depend on the borrower’s creditworthiness; the average is 12.26%, versus 19.58% for credit cards, according to Bankrate.
