Managing many credit card payments each month is a lot like juggling multiple objects. Credit card due dates often fall on different days of the month, and keeping up with all of them can be overwhelming. Consolidating these payments might not only reduce the anxiety of paying multiple bills, but also allow you to save money. It is important evaluate your financial situation and research available options prior to combining all accounts into one payment.
Pull copies of credit reports for you and your spouse from the three credit report agencies, which are TransUnion, Experian and Equifax. Purchase your FICO score, which ranges from 300 to 850. This information will give you a snapshot of your total creditworthiness. Good credit scores are those over 720.
Review your current credit card loan agreements. Look for specifics, such as annual percentage rate, annual fee and benefits. The first step in this process is to determine whether it is beneficial to roll all payments into one credit card. Determine whether you have enough available credit on a card to consolidate all loans onto it.
Pay off any small credit card bills you have outstanding. You want to get the best possible payment on the consolidation, so if it is possible to pay off a small balance (rather than including it into a new payment), do this prior to consolidating other loans.
Contact the credit card issuers of accounts you intend to roll into another existing account. Ask for payoff figures so that when you make payments there will not be outstanding balances. Make sure you get a paid-through date as well as a per diem -- the amount due each day past the payoff date.
Pay off your credit card accounts by making payments from the credit card account you wish to use to consolidate the other loans. Make these payments before the payoff dates expire.
Paying Off Credit Cards With a New Loan
Research lenders based on your creditworthiness. If you have determined that you need a new loan to pay off all of your credit card balances, you first need to know what you will qualify for.
Narrow the list of potential lenders based not just on your creditworthiness, but also on your credit and financial goals. You will be faced with a slew of options, ranging from unsecured loans to secured home equity loans (if you are a homeowner).
Choose a consolidation lender and submit an application with a loan officer. Schedule a meeting to review the loan terms and repayment options. It is important to make sure the new loan will benefit you in some way, whether it be lower payments or a lower rate.
Close on the loan only after you have determined the value of the new loan and obtained payoff amounts from all of your existing credit card lenders. You must use the proceeds of the new loan to payoff these current accounts before the payoff dates expire.
Based in Eugene, Ore., Duncan Jenkins has been writing finance-related articles since 2008. His specialties include personal finance advice, mortgage/equity loans and credit management. Jenkins obtained his bachelor's degree in English from Clark University.