Will consolidating my debt hurt my credit
In addition to the advantages described above, consolidating your credit card debt could also help your credit score.
If you choose to consolidate with a personal loan, you’ll likely see a jump in your score within a few months.
Before discussing how it could help your credit score, let’s review the non-credit perks of consolidating credit card debt.
First and foremost, consolidation could save you big bucks on interest payments.
Debt consolidation combines several debts into one, ideally with a lower interest rate.As of July 2014, the average credit card interest rate is hovering around 15%.If you’re carrying debt on several cards with this interest rate, you might be shelling out hundreds every month in interest.But on the other hand, you’re probably going to end up carrying a very high balance on the new card, which is not ideal.In a perfect world, you shouldn’t be using more than 30% of your available credit on point in time.
The right debt solution minimizes the damage you do to your financial future.