How to Combine Credit Cards

Combining credit cards to lower costs is always wise, but should be done carefully. The key is to take maximum advantage of the interest rates and terms offered by the best lenders. Consider the important factors to help make the best choices when combining credit cards.

Difficulty: Moderately Easy

Instructions

Things You'll Need:

• Open credit card accounts
• Credit scores that permit opening new, low-interest credit card accounts
• Computer or calculator

Combine Credit Cards

1. List all current credit card accounts and outstanding balances. Also, identify the individual cards (VISA, MasterCard, Discover and/or American Express) to help create a "road map" that displays some combination options. Combining credit cards is a bit like assembling a puzzle by putting all pieces in the right places.

2. Use the Internet to visit some popular websites to learn of other companies that may be offering excellent terms. Credit card companies have "sales" like all other retailers and lenders. Don't limit the combination plans to those accounts already active. There may be some excellent offers that provide both short- and long-term benefits.

3. Examine the terms offered by current and potential new credit cards. Find the most advantageous "balance transfer" options to consolidate card balances. There are different transfer options that offer low or no interest, extended grace periods and/or reduced fees and charges.

4. Use a computer or calculator to estimate a variety of combinations, identifying those that are the most cost efficient. Be patient and diligent, as this step may take some time and creativity by combining balances from different credit cards. The goal is to combine credit cards to create the least expensive result in both the short- and long-term.

5. Consider more than just interest rates when building potential credit card balance combinations. Carefully analyze all terms, including common fees (over limit, late payment, grace period, cash advance and balance transfer). It's possible that a credit card with a slightly higher interest rate may have other terms that project lower long-term cost.

6. Consider credit scores when evaluating credit card consolidations. It may make sense, for credit reporting purposes, to leave one or more card accounts open with small balances. Closing positive-rating card accounts may lower a credit score as the number of open and active accounts decreases. It may be wise to keep older accounts open with a balance to maintain or improve a credit score.

Tips & Warnings

• Know the goals of combining credit cards. Lowering credit scores or borrowing ability to simplify monthly payments may be more detrimental than helpful.
• Consider all potential fees, including those that appear irrelevant. Needing quick cash or making a payment delayed by only one day may result in high fees.
• Don't neglect to examine credit card terms carefully. An apparently low interest rate may come with a large "annual fee," which increases the finance charge.
• Don't apply for the "wrong" credit cards. For example, if the credit score is good but not excellent, an inquiry for a card for superior borrowers will lower a credit score.

References

• How to Combine Credit Card Accounts
• Tips for Combining Credit Card Balances
• More Suggestions Regarding Combining Credit Cards

Resources

• Combining Credit Cards to Lower Debt

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