Advice About Consolidating Your Credit Cards

July 31, 2011 by  Filed under: Credit 

Almost everyone has a credit card today. In fact most people own multiple cards, with the average standing at around three per person in most developed countries. Because of this huge number of cards, and the potential financial risks associated with owning multiple cards, it is essential to learn about the benefits and choices available for consolidating your cards.

There are many advantages to consolidating your cards. The main advantage is that you will start to see an improvement in your credit score. Both the number of credit sources and the amount of credit are looked at to determine your credit score, so by just transferring your credit card balances onto fewer cards you will be able to improve your credit score. The best option though is to reduce the number of cards you have and the total balance you are carrying on them, that way you will see the maximum benefit to your credit rating.

Some of the other benefits you will see when you consolidate your cards are with your fees and rewards. When you reduce the number of cards you have you will also reduce the amount you will have to pay in annual fees for them. As most cards have annual fees this can be a good reason to consolidate. Also, by reducing the number of cards you have you will earn more reward points on fewer cards, which will help you to exchange your rewards for better things, as you will have a lot of points in one place rather than small amounts of points on multiple cards.

To consolidate your credit cards you simply get rid of some of your cards and transfer any remaining balances onto a smaller number of cards or a single card preferably. There is only one thing you need to look out for when you do this, and that is balance transfer fees. Some credit card companies charge fairly high fees for any balances that are transferred to their card, and you may also have to pay a higher interest rate on the balance that you transfer. However, some companies offer no fees and even lower interest rates on balance transfers, so if you are consolidating your cards you should do some research and try to find a card that will allow you to transfer your other balances onto it cheaply.

Don’t get stuck with too many cards that you don’t need. Consider some of the above consolidation advantages, and you may be able to greatly improve your finances.

For more helpful advice about consolidating credit cards check out our site. We also recommend that you read some of our advice about how to make a good comparison of credit cards to ensure you consolidate into the right card.

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