If you have several different credit cards with various interest rates, then you should consider consolidation, which involves locking into a single low interest rate for all of your cards. Besides getting a lower interest rate, you have the chance to lower the minimum monthly payment on the debt. You can then use the extra funds to make higher payments and pay off the cards sooner.
Step 1
Inquire about balance transfer offers with your current credit card companies by calling their customer service lines. You can use your established credit card to make a balance transfer, which will involve moving the balance of your other credit cards to a single low interest card in order to consolidate your debt.
Step 2
Open up a new credit card. If your current companies do not offer balance transfers to established customers, apply for a new card that does. Once you are approved, you can then move your debt onto this credit card. You can find online balance transfer credit card applications through sites such as CreditCards.com.
Step 3
Find out the annual percentage rate (APR) on balance transfers, which will often be billed at a lower APR than purchases and cash advances. The card with the lowest balance transfer APR should be the one you choose. Keep in mind that some credit cards offer an introductory rate on balance transfers that typically last between six and 12 months.
Step 4
Give the balance transfer credit card the account numbers, addresses and exact debt amount of the credit cards you wish to consolidate. The company will take care of moving the funds to the new card.
Step 5
Determine whether to close out your other credit card accounts. Because you'll have a zero balance on the consolidated cards, you have the option of closing the accounts. However, you may want to keep a few open in order to avoid hurting your credit score.
Things You'll Need
- Balance transfer credit card
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