Pros and cons of consolidating credit cards

Depending on the consolidation method, you will end up with either revolving debt or with an installment loan that has fixed monthly payments for a set period. To consolidate in this way, look for a 0 percent or very low-interest balance transfer offer and apply for the new card (or you may receive balance transfer offers with a current card you are carrying).Each type of debt consolidation has its pros and cons, and the best choice depends on the situation, says Cary Carbonaro, certified financial planner and author of “The Money Queen’s Guide: For Women Who Want to Build Wealth and Banish Fear.”“There really is no one-size-fits-all,” she says. When you apply, you’ll supply the credit card number and amount you want to transfer from your old card.This will cause a dip in your credit score in the short term, but your score should improve as you pay down debt.Aside from the closed accounts, a DMP won’t hurt your credit, according to Experian.If you’re approved, your new credit card company will pay off the balance for you and move that balance to the new 0 percent card.You won’t always get a high enough credit limit on the new card to transfer all your debt, says Rob Berger, founder of the personal finance site Dough Roller.If you can’t get an offer with no fee, look for the longest term to have as much time as possible to pay off your debt, he says.

In some cases, you might be able to keep one credit card open if you need it for work to pay for hotels, car rentals and other expenses reimbursed by your employer, Opperman says. How to shop: Look for a reputable nonprofit credit counseling agency.Consumers who turn to typically are overwhelmed by debt and have five to seven credit cards, on average, says Opperman.Many also have other unsecured debt, such as medical debt, personal loans or installment loans from appliance or furniture retailers, Opperman says.“They’re trying to manage all the different accounts, all the different due dates and potentially creditors calling because they’re late on payments,” she says.You can pay down debt more quickly since interest fees aren’t ratcheting up the balance.Plus, transferring a balance to a new card shouldn’t hurt your credit score much, minus the temporary ding of a hard pull of your credit, and may even help your credit score due to lowered credit utilization with the additional credit line.

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