If you’re like many people, you have several credit cards in your wallet. If you have a balance on several cards, chances are you have too many credit cards to manage effectively. The interest is eating a lot of the payments you send in each month, and the more cards you have the easier it is to lose track of how much debt you really owe.
You could improve your financial situation by reducing the number of credit cards you use to about two: one for your regular use, and another as a backup card for emergency use.
Reduce Credit Cards to Simplify Finances
Take a look at each of your credit card statements to find out how much you owe and how much interest each card is charging you. You will probably find you’re paying an average of 15% interest on your credit card balances.
If you can get a 0% balance transfer card with a limit high enough to transfer all of your other cards to it – this will help you consolidate your credit card debt and pay it off faster. Instead of paying 15% interest, you’ll pay no interest! You can then focus on sending as much money as you can each month to start eliminating that debt.
If you are unable to get a new card with a large enough credit limit to move all of your credit card balances to, at least transfer the balance from your highest interest rate card(s) onto a low interest or 0% balance transfer card. Send as much as you can to the card with 0% or low interest, since more of your payment will go toward the balance and you can get it paid off faster, while paying what you can on each of your other cards.
When you pay off the balance moved to the 0% balance transfer card, or the low interest card, you can look for a new balance transfer offer to consolidate your remaining credit card balances. Repeat this cycle until all of your credit card debt has been repaid, being careful not to add new debt to your revolving credit accounts while you are paying off your previous purchases!
When you consolidate multiple credit cards into one – you only need to make a single payment each month. When you choose a 0% balance transfer offer, all of your monthly payment will go toward the debt you owe and none toward interest, which helps you get out of debt faster.
Eliminate Risk of Late Fees
An additional benefit of reducing the number of credit cards you have is reducing the potential of sending late payments. It’s much easier to keep track of one or two accounts to pay than it is to keep track of five! When you consolidate multiple credit card accounts on a 0% balance transfer card you don’t need to remember five different credit card due dates and you have much less chance of sending your payment in late. For every late payment you avoid, you save an average of $39.
About the Author:
Jeff Weber writes about saving money and reducing credit card debt with balance transfers at SmartBalanceTransfers.com, a website designed to educate consumers about 0% APR balance transfer credit cards.