How to Merge Two Credit Cards

Merge credit cards and get a better rate.

Combining two credit cards can lower your monthly payment and allow you to consolidate debt. The best way to merge two credit cards is a balance transfer offer, which allows you to combine debt and secure a low rate for a specific period of time. However, before merging two credit cards, it's important to find the best rate with the lowest transaction fees, otherwise you could lose much of the benefits of combining the cards.

Instructions

1. Contact your existing lender. Ask about balance transfer options. For example, the company may allow you to combine two credit card balances for a low interest rate.

2. Ask for balance transfer offer details. A company may offer a zero percent annual percentage rate (APR) for a fixed period, such as 12 months. When the term expires, determine what the new interest rate will be on the card. For example, the interest rate may spike to 18 percent after 12 months.

3. Evaluate balance transfer fees. According to Bank Rate, some lenders change as much as 4 percent transaction fees. On a balance of $10,000, this would be $400. If your existing credit card company charges high fees, shop for new offers.

4. Compare your existing card with other offers. Balance transfer offers can be found through online tools, such as Bank Rate. Look for the financial institutions that offer the lowest APR. Contact each company and ask about the length of the introductory rate, transfer fees and rate after the offer expires.

5. Combine the two credit cards. Choose the best deal and provide the creditor with the account numbers for the balances you plan on combining. Transfers can take up to a few weeks to process, depending on the creditor. Continue to make at least a minimum payment on credit cards until you confirm the balances have been paid off.

Tips & Warnings

• Check if the low APR applies to new balances. For example, an APR of zero percent may be good for the balance transfer. However, new purchases made on the card may be subject to an 18 percent APR.

• Don't forget to ask about annual fees. Ideally, a credit card won't charge these fees, which can be as high as $100.

References

• Bank Rate: Transfer Balances
• Fool.com: Balance Transfer Tips