Question : Is it better to consolidate credit card bills with a higher interest or have multiple credit card bills?
I received an offer from B of A to consolidate all my bills but the interest rate is higher than any of my other credit cards but it would have a pay off date.

I have a couple of credit cards that less than 5% rate interest until 2011 and there will be way I’ll be able to pay them off by then but I figure I’m saving money by having them there right now.

I’m no longer using my credit card bills to I’ve stopped the cycle. I’m only paying the minimum payments on the cards I have right now.
consolidate credit card bills

Best answer:

Answer by aztrain23
I don’t see how it’s ANY advantage to consolidate your bills to a credit card with a higher interest rate and a pay-off date.

It’s MUCH better to have multiple bills with the lowest interest rates you can get. What do the rates increase to after 2011? That’s still 3 years away, you should be trying to pay off as much as possible on your cards. Pay MORE than the minimum, even an extra $ 10 a month helps.

But there is actually hope for you, now that you’ve stopped the cycle of charging your cards and spending money that you don’t have. Most people ignore this step when trying to get out of debt, and even if they do make it out, they haven’t changed their spending habits and end up right back where they started from.

Here are a few “snowball” calculators that might help you figure out how best to handle multiple debt, and also show you the affects of slightly increasing the payments on the time it takes to pay them off and the total interest generated. I’d always go with paying off the higher-interest cards first as opposed to paying off the higher-balance cards; you’ll save money overall, but I won’t ignore the psychological boost from reducing the number of debts you have left.

http://www.whatsthecost.com/snowball.aspx?country=us

http://www.creditshack.org/calc/snowball-calculator.php