How to Consolidate Credit Card Balances

Consolidating debt makes it easier to keep track of your payments.

Consolidating your credit card debt is a wise move. Having the debt all in one place makes it much easier to monitor, and it cuts down on the number of payments you have to make to lenders each month. If you have decided that you want to consolidate your credit card balances on a single card, you will need to look at your debt-to-available-credit ratio and request a little help from your bank.

Instructions

1. Make a list of all your credit cards. Write down what the interest rate is for each one (interest rate is also called APR, Annual Percentage Rate).

2. Call the credit card issuer for each card to find out which will offer you a deal on balance transfer fees, like a zero percent interest rate.

3. Select the best card to which you'll transfer your balances. The ideal card will offer you a low- or no-interest rate on balance transfers and will also have a low APR.

4. Speak to a representative on the phone from the credit card company you have chosen, or log in to your credit card account online and choose the option to make a balance transfer. You may be asked to confirm you understand there are fees and higher interest rates for making a balance transfer. Give the amount you want transferred, your card number, expiration date, and CVC (Card Verification Code) number on the back of the card. Between one and two weeks later, the amount will be transferred.

Tips & Warnings

• Avoid transferring all your balances onto cards with a "universal default" provision. This is a new condition in credit card agreements being used by many lenders that says they may raise your interest rate for any negative information that appears on your credit report, even if it has nothing to do with their card.

• You must have available credit on a card to transfer a balance onto it. If you have no more room left on a card, try paying it down for a few months before attempting a balance transfer.

• Balance transfers usually take at least one week to complete. Continue making payments on all credit cards until the transfer has cleared.

References

• Bankrate: Consolidate Credit Card Debt
• Credit Cards.com: Universal default: What it is, How to Avoid It