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Is is better to have three credit cards with small balances or one credit card with all the... |
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Date:
December 20, 2008, 1:15 am |
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Is is better to have three credit cards with small balances or one credit card with all the balances combined? Would my credit scores rise if I transfer two credit card balances to one credit card or is it better to pay the three credit card companies individually? Please let me know and thanks! |
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Answer:
Your question may have different answers depending on how you manage all this. Of course, it's better to have one bill a month than three different bills because it's is easy to control payments. Also, it is usually cheaper to pay a consolidated debt because a balance transfer credit card offers a very low or 0% introductory APR for 6, 12 or eve 15 months. If say you have 3 credit cards with 10% APR, you definitely pay more than if you had 1 credit card with 0% APR. Concerning your credit score, it may get a small hit- once you apply for a new card - due to the hard inquiry made by the bank. But it will rise again as you pay your bill on time for a sequence of months. If you plan to transfer to an existing credit card, it won't hurt the scores. A serious damage will be made to your credit score if, after transferring balances from the 2 cards, you close these accounts. Closing the accounts will increase your debt-to-credit ration, a situation where your current balance exceeds the credit line available. With all this said, do transfer the balances, but make sure you keep the old account open and make monthly payments duly on time. |
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