As my wallet gets full of plastic cards and my mailbox gets full of credit card bills, this is the time to consolidate my credit cards. Just like other consumers, I prefer to organise my finances especially these days when costs of living simply get out of control. Carrying lots of credit card debts surely make anyone’s finances all the more crumpled. That is why it is high time to consider several available options to consolidate my credit cards.
I want to save on costs and lower interest repayment expenses. This is the usual intention why consumers aim to consolidate debts. There are several ways to consolidate my credit cards to attain lower interest rates and shoulder lower monthly payments. Stretching the duration of such loans would also be strategic.
Balance transferring of credit card debts
I have learned that one of the most effective, fastest, and manageable ways to consolidate my credit cards is through doing balance transfer transactions. This means consumers should intend to transfer their balances on high-interest credit cards into a single credit card, which facilitates such transactions and offer a much lower interest rate.
As I consolidate my credit cards through balance transfer, I make another decision. Should I use a 0% interest rate or a lifetime low-interest balance transfer? The 0% interest rate balance transaction is usually offered as an introductory scheme and would only be effective in just six months or shorter, as specified by the credit card firm. After that period, any transferred balance would incur a higher ‘revert rate,’ which could reach up to 19.99%.
Transferring balances and closing accounts
Another option I have been considering when I intend to consolidate my credit cards is closing the credit card accounts after transferring balances of some of those into a single low-interest one. Many consumers would agree that this is a wise move especially these days when credit card purchases get more tempting. If I get rid of some or most of my credit cards, I would surely manage purchases and debts more effectively.
How should I decide which credit cards to lose?
When I consolidate my credit cards, the first thing I look at is the interest rates applied. I prioritise repaying debts in cards with higher rates. Once I have cleared balances on such cards, I consider closing the accounts. This way, I would never struggle to fight the temptation again to use them and to seize opportunities to earn special ‘rewards’ points from purchase transactions. Are such points worth all the fees I pay and the troubles of accumulating debts?
Consumers like me should not wait further to control and manage credit card debts.
It is always the best time to consolidate my credit cards before debts get higher and before I get into further troubles. After all, keeping one or two multipurpose and low-interest credit cards would surely be adequate to cover my basic card purchases. How about you?
– Andrew has been working in the finance industry for several years.