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Credit Card Consolidation Through Balance Transfer

23 February 2010 by CreditCardsCo™

Lower Your Monthly Payments

One of the first benefits of credit card consolidation through balance transfer is the fact that you can lower your payments. Most people have two or three major credit cards as well as one or two store cards, all of which have different minimum payments, rates and limits. When you add to that the many due dates that you have, you could be making five or six total payments every month, which can quickly add up to hundreds of dollars, even if you stick to the minimum required payments. This can be arduous, frustrating, and hard to keep track of.

That is if you're even able to make your payments! Imagine if you lost your job or had an emergency and couldn't make payments for one month. That means as many as six different late fees as well as an extra installment next month. This adds up quickly and is how many people end up facing what seems to be an insurmountable situation or bankruptcy. Cards consolidation through balance transfer, however, can put all of the balances in one account and reduce your monthly payments down to one easy installment that will likely be around half of what you were paying for all six cards. Your interest rate will probably be lower too, as discussed at Credit Card Debt Consolidation tips and advice page.

Lower Your Credit Liability

Obviously, things get a little easier when consider credit cards consolidation through a balance transfer. As you continue to make payments on this new, easier to handle account, you will not just be reducing the amount of stress in your life. In fact, you will also be improving your credit liability. Credit liability is the ratio of the amount of credit you have compared to how much credit you are allowed to have by the credit bureau. You total limit takes into consideration your entire credit history as well as your income level, to determine your credit liability and what you are qualified to have.

Lowering your credit liability is necessary if you want more credit. For instance, many people only start out with a few thousand dollars at most. As you get older your credit needs change, as you might want to buy a house or a new car. If you are trying to make a jump like that, you need to show that even though you have a few thousand dollars limit, you aren't irresponsibly spending your money. You do this by keeping your balance low. Credit card consolidation through balance transfer helps to keep your balance low by reducing your minimum payment, letting you control how quickly you pay it down. Go here for more information on reducing your liability.

Lower Your Credit Score

All in all this translates to lowering your credit score. There are two things that you need to do if you want to improve your credit score. First of all, taking advantage of credit card consolidation through balance transfer will help you to make your payments on time. This is a major component of responsible credit management, and the three major credit bureaus keep track of this. Your creditors will be sure to let the credit bureaus know how good you are at making payments, especially how often you are late. This doesn't mean that you have to be perfect, but do try your hardest to get your payments in as early as possible. Pay more than they suggest if you can too.

Your credit score is also determined by your credit liability. When you pay off your credit cards, it lowers your available limits, which can sometimes damage your credit score! However, credit card consolidation through balance transfer can keep your limits high and help you reduce how much you owe. This will prevent the fees and interest from stacking up. For more information on how to maintain a solid, attractive credit score, you can visit this page.

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