By Jackie Veling | NerdWallet

While the holidays tend to be a reflective time, the definitive flip of the calendar into a new year can inspire you to set your sights high.

Go to the gym more. Be on your phone less. And — if you’re like many Americans — get your credit card debt under control, once and for all.

Summer 2023 marked a new high for Americans’ total credit card debt, with balances passing $1 trillion for the first time in history, according to the Federal Reserve Bank of New York.

This type of debt can feel uniquely stressful, like something you can’t get ahead of no matter how hard you try. Though there’s no quick fix for credit card debt, consolidation can be a smart financial strategy that simplifies your debts and lowers the amount of interest you pay.

Here are five signs that consolidation may be the right financial move to make in 2024.

1. You have a pretty good credit score

Your credit score is one of the most important factors when consolidating credit card debt, because strong credit will help you qualify for a debt consolidation product.

Tiffany Johnson, a certified financial planner based in Athens, Georgia, says the first step she takes with her clients is to have them pull their credit reports from the three major credit bureaus (Experian, Equifax and TransUnion) and check for any errors. You can get your credit report weekly for free at AnnualCreditReport.com.

“If they have a reasonable credit score, I would say at least 600, that’s when we’ll start looking at debt consolidation options for them,” she says.

Though some consolidation products are available to borrowers with credit scores below 600, interest rates tend to be similar to or even higher than their current debts, so it probably won’t make sense to consolidate, Johnson says. A similar rate means you’ll miss out on interest savings, and you may not be able to get out of debt faster.

2. You’re juggling multiple credit card balances

If you’re struggling to wrangle many balances, consolidating can help because it combines multiple debts into one, usually via a balance transfer card or a debt consolidation loan.

With a balance transfer, you roll all of your credit card debts onto the balance transfer card, so you’re left with only one balance. If you go with a debt consolidation loan, you use the loan funds to pay off your credit cards, leaving you with just the monthly payment on the loan.

This can make a pile of unruly debts seem more manageable, since you only have one payment instead of multiple.

Johnson says she looks for whether her clients have more than three credit cards with different payment dates, minimum payment amounts and interest rates before recommending consolidation.

3. You’re making minimum monthly payments, but seeing no progress

If you feel like you can’t get out from under your credit card debt, that’s because you’re not just dealing with the debt itself, but also the interest that accumulates when you carry a balance.

In 2022, consumers were charged $130 billion in interest and fees — the highest amount ever measured by the Consumer Financial Protection Bureau, which released the report in October 2023. Interest accounted for $105 billion of that sum.

Consolidation can help break the high-interest trap, especially if you go with a balance transfer card, since these cards have zero-interest promotional periods that can last up to 21 months. You’ll pay no interest during this time even if you carry a balance.

Debt consolidation loans do charge interest, but if you qualify for a lower interest rate than the average rate across your credit cards, you’ll still save money.

If your debt is half or more of your gross income, or it’ll take you longer than five years to pay it off, you may want to explore debt relief options instead of consolidation. For example, working with a reputable credit counseling agency to enter a debt management plan can help you pay down your debts at a reduced interest rate.

4. You’re motivated by a clear finish line

The psychology behind paying off debt is just as important as the logistics, says Allison Sanka, an accredited financial counselor based in Berwyn, Pennsylvania.

If you prefer knowing an exact date you’ll be out of debt, consolidation can give you a clear endpoint, particularly if you go with a debt consolidation loan. These loans have fixed interest rates and repayment terms, so as long as you make the payments on time, you’ll know the exact date you’ll be debt-free.

But a loan isn’t the only option. Sanka says most of her clients have success without consolidating by using the snowball or avalanche methods, in which you tackle debts one-by-one, starting with either the smallest debt (snowball) or the one with the highest interest rate (avalanche).

“I have my clients pay off the lowest balance first if they can knock it out really fast,” Sanka says. “It’s pretty psychologically rewarding to see the debt being tackled in its original form.”

5. You’ve gotten to the root of your debt

Both Sanka and Johnson emphasize addressing the origin of your debt before consolidating. If you skip this step, consolidation won’t matter since you’ll likely find yourself in debt again, they say.

Sanka recommends working backward to figure out what led to your debt in the first place. For example, if you struggle to manage unexpected expenses, it’s important to build up an emergency fund. Even $500 can mean the difference between being able to cover a surprise bill or having to reenter the debt cycle, she says.

Johnson advises clients to not use their credit cards for discretionary expenses like eating out since those costs vary month-to-month and are hard to budget for. Instead, tie fixed expenses to your credit card so that you’re charged the same amount each month. You’re then less likely to be caught off guard by your credit card statement, she says.

“You just need something to keep you off the hamster wheel of using the credit card for everything that comes your way,” Sanka says.

The article 5 Signs You Should Consolidate Your Credit Card Debt in 2024 originally appeared on NerdWallet.