Does consolidating your credit cards hurt your credit

Debt consolidation is one of the primary options available to indebted consumers who are looking to ease their path to zero balance as well as save money and protect their credit standing in the process.

Unlike other alternatives – such as debt management, debt settlement and even bankruptcy – debt consolidation, when done right, won’t damage your credit standing in any significant manner. You can check out our Debt Consolidation Overview if you don’t know exactly how it works, but the basic theory behind debt consolidation is that you can use a new loan or line of credit to pay off existing debt obligations in order to garner a lower overall interest rate and a more manageable monthly payment.

The end result is impossible to gauge ahead of time – as it depends on multiple factors, including the extent of your credit history, the accounts you have open, and the actions you take after consolidation.

In most cases, however, debt consolidation will lead to long-term credit score gains, since it will decrease your odds of default and put you on more stable financial ground.

When trying to deal with debt, consolidating your credit cards and low interest loans can help you save a lot of time and money.

You can stop the plan at any time, and you can also pay more -- and get out of debt faster -- when you have extra funds. You wouldn't, which is the reason consolidation begins with a counseling appointment where your entire financial situation is assessed.

This will allow you to make one payment and sometimes will result in lower payments.

Warning: Many zero-percent or low-interest credit card offers only last for a limited amount of time.

Some creditors might be willing to accept lower minimum monthly payments or change your monthly due date because they would rather get paid less on a regular basis – than not get paid at all.

Here’s what you need to know if you are considering these options for consolidation: Transferring different debt balances to one credit card account Many credit card companies offer zero-percent or low-interest balance transfers to allow you to consolidate your debt on one account.

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