American consumers have an average of four credit cards to their name. With multiple credit cards, it is easy to forget to pay a bill here or there. Varying interest rates and introductory offers on cards also create confusion. Consolidating credit cards into one monthly payment may help consumers keep track of their finances, lower interest rates and get their debt under control.
Step 1
Research personal loans and credit cards with multiple companies to find the best offers. Look for a loan or credit card with a low interest rate for the life of the loan, not just a low introductory rate. Choose an account with no annual fee or balance transfer fee. Consolidating your credit card bills into one monthly payment should not cause you to lose money on useless charges. When you find a loan or a credit card that suits your needs, apply for it. Remember not to apply for multiple accounts at the same time to avoid excess inquiries being placed on your credit report, which can decrease your credit score.
Step 2
Provide the lender with all of the account information for any account you would like to balance transfer. You will need full account numbers and balances. The lender will make the arrangements to have the balances transferred to the new account, making the payments directly to each credit card company. The checks will not be issued directly to you.
Step 3
Follow up with each credit card company after about one week to ensure the balance transfers were successful. If possible, avoid closing the old credit card accounts. Credit scores are calculated partly by the length of credit history, and by available credit. Closing these accounts can decrease your credit score by decreasing both. Assess your personality, however, and determine your likelihood of charging new balances on these cards. If you believe you will use the cards in excess again, closing the accounts will be the best option for you in the long run.
Step 4
Make timely monthly payments on your new consolidation accounts to avoid late fees and increased interest rates. Your lender may offer you the option of setting up automatic payments, which are debited out of your checking or savings account. Take advantage of this convenient payment method if possible.
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