I have 3 credit cards that vary from 9.0% to 12% interest. Is it smart to get a card from my credit union for credit consoldation? What is the best strategy for Credit Consoldation? Will it hurt me to close these other three accounts?
When you say that you are planning to get a card from your credit union to consolidate your current credit cards, I assume that you mean you credit union is offering you a credit card to which you can balance transfer the three accounts. I will try to give you some general Credit Consolidation advice, but if you are struggling with debts -- I highly recommend getting a free debt savings quote from one of Bills.com's approved debt partners:
Now to your question: Whether or not this balance transfer will improve your financial situation depends on the interest rate and other terms being offered by the credit union on the new card. If the interest rate on the credit union card is lower than the average rate of your three current accounts, and if the interest rate is not scheduled to increase to a much higher rate after a certain number of months. Frequently, the rates and terms offered by credit unions are better those offered by conventional credit card banks, so it likely that this balance transfer could benefit your finances. Just make sure that you carefully compare the terms being offered by your credit union and the terms on your current credit accounts to make sure that you are making the right decision for your particular situation.
Credit scoring is too complicated for me to tell you specifically how a particular action will affect your credit score, but I do not think that transferring your accounts would have much effect on your score. Usually, you are not required to cancel credit cards you pay off with a balance transfer. The primary benefit to keeping the credit cards open is to maintain your positive payment history, which is a major component of your credit score. If you decide to keep the accounts open, make sure that you do not charge up a new balance. A common pitfall for consumers who transfer debts is that they then charge their old credit card accounts back up, leaving them with twice the debt that they started out with. If you are considering a balance transfer, I definitely encourage you to get rid of many of the accounts you paid off with the transfer so that you are not tempted to use the cards again and put yourself in a worse financial bind. You can keep one or two of the accounts open for emergencies, and to maintain accounts with a long payment history on your credit report, but you should try to pay off any charges made on the accounts at the end of each month, if at all possible. To read more about credit reports and credit scoring, I encourage you to visit the Bills.com Credit Resources page at http://www.bills.com/credit/
I hope this information helps you Find. Learn. Save.
Best of luck,