On the other side of things, consumers have abused balance transfers by using the strategy repeatedly, hopping from card to card.
Both of these factors have made creditors less willing to promote balance transfer at tempting promotional rates.
As a result, when you overcharge and rely too much on credit, your bills can get out of control and start to take over your budget.
This is where debt consolidation comes in handy, because you rein in those high payments and simplify them into one low payment instead.
There are several reasons for consolidating and ways to do it that vary widely depending on the type of debt you have.
So credit card debt consolidation is different from student loan debt consolidation.
There are a few ways you can do this, including a balance transfer, a debt consolidation loan, a personal loan or a peer-to-peer loan.
You can learn more about your options in the guide below and decide which one is right for you.
Credit card consolidation could improve or hurt your credit depending on how you use it.A credit card consolidation loan combines your outstanding balances on your credit cards into one monthly payment.The benefit is that you’ll pay off your existing debts with those credit card companies and have a simplified payment process with just one lender.If you’ve fallen behind and have been making late payments on your credit cards, consolidating them to one monthly payment could raise your credit score as your payment history improves.On the other hand, taking on a new loan, in general, could cause a short-term drop in your credit score because of the hard inquiry.
In recent years, balance transfers have become a less realistic option.