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Should I Consolidate My Credit Cards? 7 Questions to Ask Yourself First

March 29th, 2016 · No Comments · Debt Consolidation

by Kristy Welsh

(Last Updated On: January 16, 2018)

Should I Consolidate My Credit Cards? 7 Questions to Ask Yourself FirstIt sounds so much simpler, paying toward just one lower-interest credit card every month. It can also be cheaper if you find the right balance transfer deal. But none of this is guaranteed. If you don’t do your homework, you could get yourself into a tighter spot than you’re already in. So if you’re trying get your credit card debt under control (and improve your credit in the process) here’s what you need to ask yourself about credit card consolidation.

1) Did you already ask your current credit card companies for lower interest rates?

It may seem like a long shot, but you never know, especially if you have a good payment history and they know you are thinking about transferring to a new card.

2) Can you transfer to a card you already have?

What’s the lowest interest rate you’re paying on the cards you already have? Do you have room on that card to transfer other balances? And is the interest rate low enough to make a difference? Do the math (see below).

3) Can you afford a balance transfer?

First, consider your current situation:

  • What you currently owe on the credit card balances you want to transfer
  • Interest you’re currently paying on these balances every month
  • How much you’re currently paying toward these cards every month

Then consider what your new situation would look like after a balance transfer:

  • What you’ll pay in interest on the transferred balance/new card every month
  • How much you can afford to pay on the transferred balance/new card every month
  • The balance transfer fee for consolidating multiple credit cards onto one (usually 2 to 5 percent of the transferred balance)

4) How quickly can you pay it off?

If you already have a plan in place to pay off your current credit cards within 6 months, it may not be worth the time, effort, and balance transfer fees. That said, plans change and you know yourself best. If you have any doubt as to whether you can pay off your current cards in under a year, it’s worth looking into consolidation.

There is also the new interest rate to consider. If it is a limited-time low or zero interest rate, how confident are you that you can pay it off before the new rate kicks in? If you’re skeptical, think twice, and do the math on how much the new interest rate will cost you.

5) Is your credit good enough?

If you have bad credit, you’re probably not going to find a low enough interest rate to make a balance transfer a good idea.

If you have no clue what your credit is, find out:

Get copies of your credit reports from Get all three reports from all three bureaus and go through them with a fine-tooth comb. If you see errors, dispute them with the appropriate bureau. (Note, the bureaus have 30 to 45 days to respond, so you won’t get an answer right away.)

Find out your credit score. You can order it through or you can sign up for free credit monitoring through sites like Quizzle, Credit Sesame, Credit Karma, and WalletHub. These sites will also monitor your credit reports every month, a big help considering you can only get your free reports through once a year.

If your credit is good enough to qualify for a low-interest card, great. If not, you’re probably best-served sticking with the ones you have.

6) Can you resist using your cards for new purchases?

This includes your new card (if applicable), as well as the ones you’re transferring the balances from.

First, in reference to a new card, keep in mind that if you get a special introductory interest rate, this may apply only to balance transfers, not new purchases. So make sure you have at least one other card that you can use for new purchases, need be. That said, the last thing you want to do is rack up new credit card debt.

Second, in reference to your old cards, can you resist maxing them out? While it’s not recommended that you close these cards – as that will affect your credit utilization ratio – you’re best-served doing so if you doubt your ability to resist charging them up with a bunch of new debt.

Ideally, credit cards should be used for 1) convenience and 2) to build credit, period. That means only charging as much as you can afford to pay off every month.

7) Are you willing to take the time to shop around for the best deal?

If you’re looking for a new card for consolidation, be sure to shop around for the best deal. There are a number of credit card comparison sites you can check, like CardHub, NerdWallet, Credit Karma, and Bankrate.

Get more tips on paying off credit card debt.

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