Refinancing Credit Card Debt (Kredittkortgjeld Refinansiering)

Credit card is one of the tools that have kept a lot of people in debt.  A number of people have multiple cards and most often are prone to misusing them. These debts accumulate due to the penalties and interest that accrue when consumers make purchases with their cards and fail to settle their accounts at the end of the month.

There is a penalty for late payment if a consumer does not pay what they owe the issuing company. The company will then send the report of the late payment to agencies in charge of credit rating. The penalties that come as a result of defaulting on one’s payment oftentimes increase the total sum that a consumer has to pay.

Additionally, the interest rate on a card can increase drastically if a customer misses several payments. This increase is known as penalty APR and it differs from one card to the other. The issuing company usually states this in their terms and conditions which is printed on paper and attached to the card when they ship it to the customer.

This brings us to the subject of how to tackle this issue of debt. In this article we will share tips on how to manage credit card debts and also how to refinance it. You can go ahead to visit to quickly learn about it. You will however be better served by reading through the article so you can get a good understand of the process.

How Does Refinancing A Credit Card Work?

Credit card refinancing is a process through which a person with credit card debt(s) takes out a loan to pay off the debts. This is also known as debt consolidation.  It comes in handy when one has multiple card debts; you take out one loan, pay off all the debts and then begin to service just one debt.

Most people with multiple credits cards often fall into debts mostly because of their inability to manage these cards.  But with refinancing, they can get one lump sum to pay off all the debts and concentrate on one loan. This will help them access fixed interest rates, predictable monthly payments and a specific date when the debt will be paid off.

In an ideal situation, when you refinance your credit card debt, it is supposed to lower the cost of the debt. This is as a result of reduced interest rate or monthly payments.

Let’s give you an example of how this plays out:-

Mr John Doe has 4 credit cards with debt balance of NOK10,000 and an average APR(average percentage rate)of 26.00%. This means that he would have to make a monthly payment of NOK317 for more than 4 years and 5 months to offset the debt. At the end of the day, he would have paid NOK7,013 interest charges.

If he refinances the NOK10,000 with a refi loan with a 3- year repayment plan at 8% interest rate, he will be able to pay off the loan 1 and half years earlier. His monthly payment will reduce as he would have to pay NOK313 monthly and his interest will be NOK1,281. His savings from the above scenario will be NOK5,372.

Pros And Cons Of Refinancing Credit Cards Debt

With every decision that one makes in life there are benefits and disadvantages. In this segment, we will briefly discuss the pros and cons of refinancing credit cards debts.


  1. Lower Interest Rate – The average interest rate on credit cards by the end of 2022 was 20.40%. But some cards come with either lower or higher rates; this depends on the card issuer. However, when you refinance your card, you may get lower interest rate based on your credit score. This would of course help you offset the debt faster.
  2. Reduced Monthly Payments- If you decide to go for a loan with longer repayment duration, you get to lower the monthly payments that you have to make. This can make life a lot easier for some as it eases budgetary restraints.
  3. Ease of Tracking Payments- Like we have mentioned, it is difficult for some consumers to track payment on multiple cards. But a refi loan allows the customers to pay off all the debts and then have only one loan to service. This makes it easy to track the payment and not miss anyone.


  1. Fees – There are fees involved in the process of refinancing so before you start the process, bear in mind that you will pay some fees. If these fees are too much, it may diminish whatever savings you get from the refi especially if it is not a substantial sum.
  2. You Might Incur More Debt- If you have excessive charges on the cards that were just paid off, you can fall back into debt and even deeper. So before you embark on a refi application, you need to work on changing your spending habits if they are unhealthy.
  3. Potential To Lower Credit Score- Some lenders would always conduct a hard credit inquiry whenever a customer applies for loan. This hard inquiry has the potential to lower one’s credit score. But thankfully, you can correct this in a few months’ time.

Factors To Consider Before Refinancing Your Credit Card

Refinancing is not an issue to be taken lightly; there are factors to be taken into consideration before anyone embarks on the process. Below we discuss some of these factors.

Terms of Repayment

Anyone that’s considering taking out a refi loan should think of how long they would have to repay the loan. The repayment terms can be from 1 to 7 years; it all depends on the bank or lender. It is however, recommended that you choose the shortest duration possible.

The longer a loan repayment term is, the higher the probability of high interest rate. On the other hand, a shorter repayment term comes with the possibility of lower interest rate. This is the reason for our recommendation that you choose an option with short repayment duration.

Amount To Be Borrowed

Consumers are advised to take note of the amount of money that was approved by the lender. This will help a lot in the comparison of offers. This is because some loans may end up not being actually cheap when you add the fees and interests.

Annual Percentage Rate

Abbreviated as APR, this is the sum of the interest on the loan and additional fees. This is what lets you know the total cost of the loan that you seek to obtain. Your total APR is usually predicated on your credit score and terms of your repayment. Click here for more information on APR

Requirements For Qualification

You need to know the requirements for qualification. Know your credit score and whether your application is likely to be approved. It is not in your best interest to risk lowering your credit score with a hard inquiry and then end up not having your application approved.


You need to bear in mind that when you are approved for a loan, you may be expected to pay origination fees and other fees that will be added to the overall amount that you have to repay. So put all these fees into consideration before appending your signature on any agreement.


Most lenders allow a borrower to apply with a cosigner. So if you want to refinance your credit card debt and you have low credit score or other issues that may disqualify you, you can consider a cosigner. The cosigner should know that they will be liable if the applicant defaults on their agreement.

Also note that your cosigner must have a high credit score and good credit history.

How To Manage Credit Card Debt

Apart from refinancing your credit cards, it is actually necessary for you to know how to manage your debts.  So as we wrap up this article, we will share some tips with you:-

Develop Healthy Financial Habits

A number of people are carried away by the euphoria of swiping a card and getting whatever goods and services that they want. This however is what has dug many into deep financial pits. So instead of seeking instant gratification with your credit card, you can defer some purchases and save to make those purchases.

One healthy financial habit to develop is not to spend or make purchases on a whim. Never use your card for frivolous spending; always think it through before you make any purchase.

Always Look For Ways To Save Money

If you are able to save money consistently, you will find out that you will not always have to max out your card. Experts posit that you can enhance your saving habit by doing the following:-

  1. Evaluating and managing how you spend money.
  2. Set up a budget and follow it strictly.
  3. Always try to negotiate for better deals on your subscription and recurrent services and purchases.
  4. Have multiple streams of income.
  5. Have an automated standing order for direct deposits so that you can save a specified amount monthly.

Have A Concrete Repayment Plan

If you already have a crippling credit card debt, you need to have a concrete plan for repayment. Do not leave anything to chance; be deliberate about repaying the debts. There are NGOs and support groups that are willing to help you formulate a repayment plan and stick to it.


The issue of credit card debt is a serious one and has debilitating effects on not only the individual but the economy as a whole.

In this article, we have discussed a number of things about this issue. We have shared basic information that we believe will help the reader to successfully refinance their card debts or manage the debts.  We urged you to take note of these tips to help us make good financial decisions going forward.

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Libby Austin

Libby Austin, the creative force behind, is a dynamic and versatile writer known for her engaging and informative articles across various genres. With a flair for captivating storytelling, Libby's work resonates with a diverse audience, blending expertise with a relatable voice.
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