Credit cards can be a useful financial tool. They allow you to borrow money to cover purchases now, with the agreement that you’ll pay the money back later. They’re also incredibly easy to misuse - if you don’t keep track of your purchases, you could be facing large credit card balances that are difficult to pay off down the road.
Credit card consolidation may help you pay off your credit card debt with one monthly payment. Although this strategy can help reorganize your debts, it comes with consequences and considerations that should be kept in mind.
If I Consolidate My Credit Cards, Will It Hurt My Credit Score?
A major factor in your credit rating is credit utilization - this is how much of your credit you’re currently using, and how much is still available for use. By carrying large credit card balances, you’re increasing the amount of credit being used, and likely causing your credit score to drop. However, as soon as you begin to reduce your credit utilization, your credit score should begin to increase.
You can also hurt your credit score by not making the minimum payments on your cards. Defaulting or missing payments usually lowers your score.
Fortunately, credit scores can recover over time if you practice good financial habits and pay down your debts. If you make consistent monthly payments, pay more than your minimum and avoid putting future purchases on credit cards, your credit score will likely improve.
How to Consolidate Credit Card Debt
Credit card consolidation works by combining all of your outstanding credit card balances into one monthly payment. This can be accomplished in a few ways:
- Transferring existing balances to a new credit card
- Taking out a personal loan to pay off card balances
- Working with a debt relief company on a credit card debt relief plan
Combining your multiple existing debts into one debt allows you to focus on one payment rather than juggling several accounts and due dates. Depending on the consolidation method you choose, you may also be able to secure lower interest rates. When working with a debt relief organization, your debt negotiators will likely be able to negotiate settlements that are lower than what you originally owed.
Pay Off Credit Card Debt with Accredited Debt Relief
Accredited Debt Relief has helped customers across the country simplify their finances through credit card debt consolidation. With an A+ BBB rating, we offer customized financial solutions that can help you pay off your credit cards quickly. Our experienced team can help lower your monthly payments while debt negotiators work to reduce or eliminate excessive fees. To learn more and receive a free, no obligation consultation, contact us today.