is it advisable to consolidate my credit cards into one if they belong to the same lender?

i have two credit cards which belong to the same bank. is it advisable to consolidate both the accounts and keep the one with the lower APR. in this process the other one gets automatically closed and the credit limits are added into the one account. is this process likely to affect my credit score in any way?

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Sunday, April 19th, 2009 Credit Card & Loan Consolidation

6 Comments to is it advisable to consolidate my credit cards into one if they belong to the same lender?

  1. Credit card debt consolidation adds up all your unpaid balances and converts them into a single payment. This payment is far lesser than each of the individual payments.

    When you finalize a plan with a debt consolidation company, the company repays your dues to your creditors. Then you make a single payment to the consolidation company every month. Your average new interest rate is much below the old interest rate.

    2. See Saw on April 19th, 2009

  2. It's up to you. If it's the same lender it shouldn't make any difference except if one card has a lower interest rate. If you can pay it down every month and have made all payments you'd have a good credit rating anyway. Some cards have higher interest rates but you can earn points or air miles. It's up to you depending what you want from a card.

    3. Jeepwife4ever on April 19th, 2009

  3. i've heard the closer your cards are to the limit, the worse it is for FICO. and for FICO's sake you're never supposed to close any accounts. so I would suggest you concentrate on paying off the high-interest card first, but keep both accounts open.

    4. njyogibear on April 19th, 2009

  4. I would consolidate but would not close the other account if you don't have to because the more line of credit you have the better score you have. When you close an open line of credit I've heard that it lowers your score because you've eliminated a source of $$ that lenders are willing to lend you.

    5. violetcablas on April 19th, 2009

  5. Depends on the bank who is the carrier for the cards, some can some can't you'll just have to call them and ask them. If you're keeping the same credit limit no it won't be affected, if you lower the credit limit affected for the positive or increase the credit limit affected for the negative. then yes.

    6. She on April 19th, 2009

  6. To give a better answer, more details are needed. It depends what charge the bank will be making for you to make the balance transfer. Reasons I would say no.

    1) If the term of the balance transfer is a temporary "promotional" rate which will then increase later to a higher rate that will result in them collecting more money.

    2) if the terms of the balance transfer creates a new account with new terms that would allow them to increase your rates at their whim (a tactic that many credit card companies are employing now… it is a bait and switch tactic)

    There must be some reason why your bank is allowing you to do this that will benefit them. I know of absolutely 0 banks that will allow you to make a move like this without it having a benefit to them (hidden or otherwise).

    While credit scores can be a mystery (like who actually has an 850 credit score), I would say that this has the potential of hurting your credit score. Even though it would seem to be counterintuitive, it is better to have 5 cards each with a $1000 credit limit and $500 on each one than to have 1 card with a $5000 credit limit and a $2500 balance.

    I say keep the two cards, pay down the one with the lowest balance first, then apply that payment to the monthly payment on the other one to accelerate paying down that other card.

    7. Daniel Z on April 19th, 2009

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