Hi everyone! I need some help. Most ads and commercials about credit cards and loans offer the chance to get all your credit crads in one new one, or to have the rest payments of a loan to one new one, and of course from a different bank. Although I think that this is good if you are paying and paying, I keep wondreing about the interest rate. If the capital is bigger isn't the interest rate bigger, too?
If you are wanting to pay off your credit cards I recommend using Dave Ramseys debt snowball rather than consolidation. I'm not sure if the interest rate would be more or not, but there are many shady companies that offer consolidation and are a rip off.
Absolutely what I was going to say! I would definitely not recommend to go with consolodating because most of the interest rates are astronomical! You are much better off paying your lowest balance first, then the next lowest, etc. That way you are getting rid of credit cards one by one. If you need more info on it, let me know. I have helped a lot of family members and would be happy to help out if you need anything!
Another issue is that there are fewer options for payment if something should come up then there would be with an unconsolided loan or credit card.
I think no matter you have one or more credit cards, the important thing is you can manage your credit cards wisely. The correct usage of credit cards is a reserve fund and used only when an urgent condition. Be careful in shopping at the supermarket do not let you be tempted by a huge discount program. Now I have nine credit cards and if there is a new card offers from other banks I still willing to accept. The high credit card limit does not affect the interest rates.
I believe that the reason people are more prone to owning multiple credit cards, is so that they can mix and match to maximize cash back or other options. I've also read about people who own up to 20 credit cards that they sign up for, just for the bonus. They are constantly applying for and canceling credit cards so that they could possibly travel for "free." My preference however, would be to stick with a couple or maybe even 3, and use them for different purchases. For example, using one card for grocery shopping, one card for online shopping, and the last for gas. This would help with keeping records so that you don't have to manually sort the data.
