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What is 'consolidating' debt and why do people do it?
This can mean a few things to me.  Some of which has been mentioned already. It can mean one (or all) of the following to me: You take out a new credit card and transfer ALL other credit balances to it. (Only good if you destroy the others, this is a 0% offer, AND you plan on paying this card off furiously.) You do the loan thing mentioned earlier. You go to a credit consolidation service who will handle your paying your payments and you send them one payment each month.  (Highly discourage using them.  A majority of them are shady, and won't get do what they say they will do.  Check Better Business Bureau if you find yourself considering them as an option.) In the first two cases, you are just reducing the number of hands reaching into your bank account.  But keep in mind, doing this is not the same as paying off debt.  You can't borrow your way out.  You can do this as part of your plan, but do so CAREFULLY.