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msw2013

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Debt consolidation
Does consolidating credit cards to a new card, with a 0% intro rate really help reduce debt and increase your credit score? When is this a good idea?

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Yes it does!!  First, it increases your available credit and decreases your usage ratio.  I had 3 credit cards at almost 20% interest and the highest credit limit was $1500, with the other two @ $1000 and $500 and the total debt was $2100.  My credit union allowed a consolidated card @12.99% on all purchases and I got the consolidation for 12 months.  The credit limit they gave me was $12,500 (could have knocked me over with a feather!!!). You can do the math on the available credit.  My credit score increased significantly!!  I choose to pay $300/mo or more so I can get the charges paid in full as soon as possible, then I will make sure to pay all charges every month when the bill comes in to avoid paying interest.

It helps if you check your credit reports from all three credit bureaus once a year to make sure the information on the report is correct.  Consolidating makes good sense if the interest rate on the cards you have is high and you can get a lower rate AND if you can/will pay a lot more than the minimum payment on credit cards so you can actually see your debt declining every month.  The ultimate goal in credit usage is to always have a large amount of credit available and be able to pay accounts in full every month.  

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