I have a friend who is so excited because he just consolidated his student loans and is now saving money because of it. Any time I have looked at consolidating, I would end up paying more because the final interest rate is the same as my highest interest rate. Why would I want to raise my overall interest rate every month when I can keep paying separately and with lower rates elsewhere? Has consolidating debts ever helped you?
In the past I really had a lot of debt spread across multiple credit cards. Much of this related to some issues at home with a gambling-addicted mother who couldn't afford her own housing payments or basic necessities. In any case, I was paying various interest rates, paying the minimum on all except the 1 I was focusing on paying off. Now, the huge life saver for me was being accepted for a 0% APR for 1 year and 2.5% balance transfer credit card. They gave me $14,000 to consolidate it all. Not only did I save in not having to pay the interest, but it also gave me some breathing room so that I could just pay the minimum on this 1 card (which was overall lower than the minimum on say 5 other cards a month), get myself back on track, and work towards true financial stability. In the end, it all worked out amazingly well, but I also realize it can be difficult to get credit when your credit utilization is already high. So try to look for a credit card that specifically mentions balance transfers and promotional APRs as they tend to be the ones that want you to consolidate using them and thus are more to be a bit more understanding of your financial challenges.
Consolidating my credit card debts at a much lower rate helped me pay off two credit cards besides simplifying my financial life. Before deciding to avail of a balance transfer offer, I did a comparison of the interest charges I've been paying on the two credit cards versus the interest I'd be paying if I decide to consolidate the loan balances. The huge savings over the two-year period made me decide to push through with the consolidation. That cleared the balances off the two credit cards. I closed one card and maintained the other for emergency. There are actually some banks that offer 0% interest when you move your credit card balances to them and this is something worth looking into. You'll have to be careful about the terms, though, as some may charge a joining fee which could negate whatever savings you're expecting to generate from the deal.
