How Can I Combine Credit Cards Into One With Lower Interest?

Carrying a balance on your credit cards can get very expensive if you have a high interest rate, and one way to lower your expense is to transfer the balance to a credit card with lower interest. Whether the card is one you already have or a new card with a low introductory rate, you will save money on interest charges and free up more of your money to pay down the balance on your card.

Instructions

1

Find a credit card with a lower interest rate than a credit card on which you carry a balance. This card could be one of your other credit cards with a large credit line. Another option is finding a new credit card to apply for.

2

Read the terms for the credit card with the low interest rate and make sure the low rate applies to balance transfers. If you have not yet applied for this card, be aware that you may not qualify for the lowest advertised interest rate.

3

Inquire about the fees associated with a balance transfer by calling the credit card company or reading the fine print in the terms. Many credit cards charge a fee of as much as 5 percent of the balance, which would be $200 on a balance of $4,000. If the fee is high, you may not save any money by transferring the balance.

4

Apply for the new credit card if you are combining old credit cards into a new one. Read the agreement that comes with the new card to make sure everything is what you expected.

5

Transfer your balances from cards with high interest rates to your low interest rate card. Call the customer service phone number printed on the back of the credit card to learn how to transfer a balance to that card.

6

Continue making the minimum payment on your old credit cards until the balance transfer goes through, which could take up to a month.

7

Schedule automatic payments to make sure you never miss a payment on your credit card. The low interest rate may jump if you miss a payment, leaving you in a worse situation than before.

8

Pay off your credit card debt aggressively if the low interest rate is only for a limited time. You will have to pay the higher interest rate on any balance left on the card when the interest rate goes up.