After responding to just a few "limited time offers" for new credit card promotions, it is possible for anyone to suddenly wind up with more credit cards then she needs. One of the keys to managing your credit effectively is simplifying your banking and debt allocation, and merging credit cards is an effective tool for consumers. This can help avoid missed payments and additional transaction fees, and having fewer payments and balances to track will simplify your monthly banking process.
Merge credit accounts that belong to the same bank first. Sometimes banks will allow you to transfer your credit balance and your credit limit over to one card, consolidating all of your credit information onto one card. This is the ideal situation, as you retain your credit limit, which is useful in maintaining a low debt/credit limit ratio, one of the factors used in determining your credit score. Contact your bank's customer service and ask a representative to talk you through the process and tell you what your options are.
Combine your accounts from several banks. Contact all of your banks' customer service departments and ask them if they would be willing to accept credit limit transfers as well as balance transfers. Most banks will not transfer your limits as well as your balances, but they may if they are running promotions or looking for additional customers.
Transfer your balances from higher interest cards to lower interest cards. If your banks will not allow you to transfer your accumulated credit limits as well, this can be your best option. Simply request a balance transfer through the bank with the lower interest rate and transfer the complete balance. You will be required to pay a transfer fee, but in the long term you will save money on the lower interest rate. Then, choose to either leave the other accounts open or close them to simplify your credit profile.
Some credit advisers recommend never closing your credit accounts so that you can maintain a high credit limit overall, but if you feel stress from having an account that you are not watching carefully, close your extra accounts and focus on maintaining the remaining accounts.
Do not close more than a few accounts a year, as this could have a negative effect on your credit score.
- FCIC: Building a Better Credit Report
- FTC: Building a Better Credit Report
- Experian. "What Affects Your Credit Scores?" Accessed Oct. 9, 2020.
- MyFICO. "Credit Checks: What Are Credit Inquiries and How Do They Affect Your FICO® Score?" Accessed Oct. 9, 2020.
- Experian. "What is a Credit Utilization Rate?" Accessed Oct. 9, 2020.
Nat Fondell has been writing professionally since 2006. A former editor of the "North Park University Press," his work has appeared at scientific conferences and online, covering health, business and home repair. Fondell holds dual Bachelors of Arts degrees in journalism and history from North Park University and received pre-medical certification at Dominican University.