Consolidating my credit cards

By understanding how consolidating your debt benefits you, you'll be in a better position to decide if it is the right option for you. New credit accounts are subject to application, credit qualification, and income verification. Be sure to check out any potential online lenders with the Better Business Bureau before applying for a debt consolidation loan online.And you can verify if a lender is registered to do business in your state by contacting your state Attorney General’s office or your state’s Department of Banking or Financial Regulation.You also may not want to close your old credit cards, as this can potentially ding your credit scores as well.

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Credit cards may have a balance transfer fee, so you’ll want to make sure that cost doesn’t outweigh the potential benefit of getting a lower interest rate on your debt. Ask about any loan origination fees, and make sure the loan payment amount is something that easily fits into your budget.

Credit card consolidation can affect your credit in many ways, depending on which strategy you choose.

For example, if you’re consolidating multiple balances onto one credit card, you’ll want to avoid maxing out that card’s credit limit because that will hurt your credit utilization rate (how much debt you’re carrying compared to your total credit limit).

Before you apply, we encourage you to carefully consider whether consolidating your existing debt is the right choice for you.

Consolidating multiple loans means you'll have a single payment each month for that combined debt but it may not reduce or pay your debt off sooner.

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