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Americans carried $1.26 trillion in credit card balances as of mid-2026, close to an all-time high, while the average rate on revolving balances sat at 22.15% in the second quarter, per Federal Reserve data.
Roughly 60% of cardholders carry a balance forward each month. Against that setup, debt consolidation is in focus as a way to reduce carrying costs, and the arithmetic turns on a single rate comparison.
How the rate math works Consolidation combines several debts into one new loan or credit line at a lower rate. The most common targets are unsecured balances: credit cards, medical bills, older personal loans.
The math only works when the new rate clears the weighted average across existing debts.
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