Credit consolidation.

2min read
Posted 10 April 22

Credit consolidation is when your existing debts are brought into one manageable amount to repay instead of several smaller, separate repayments.

 

Credit debt and consolidation. 

Keeping a card open with a good repayment history can help grow your score. It all depends on what you can afford because each card will have a minimum repayment amount. 

If you're thinking of getting around your borrowing limit by taking out more cards, it may pay to reconsider. Providers will perform a full credit enquiry on you when you apply and so can see your previous credit history, including any other credit cards you've held. 

If you've already got many credit cards on the go, the best approach might be to consolidate them into one credit card. Doing so can make your repayments much easier to manage. Talk to your bank or credit provider about consolidating your existing debt onto one card.
 

Interest fees.

One of the biggest advantages of credit consolidation is that interest rates are generally lower on a single consolidated credit card. That's because you're taking the average of your existing credit debts to pay off at one standard rate. 

The downside is that you may pay more interest with the higher overall cost. That's because you're repaying on installments over a longer period. There are other establishment or change over fees involved, depending on the terms of your other credit card providers, which might make it too pricey to consider until your original payment date ends. 

So, whether credit consolidation is for you will depend on where you are financially and how many additional fees transferring your credit debt will incur.


 

Stop! Disclaimer!

Info and tools on the Yonda website are to be used as a guide only and do not constitute financial advice. Use Yonda as a starting point and then seek professional advice.