Okay so my mom has 3 credit cards right now. One only has a $1000 balance (and a huge credit limit of $20K plus), a Lowes store card and a $100 Walmart card. My aunt suggested that she move all debt to one card so she has only one monthly payment. I advised her against it because she just opened up the Walmart card and opening and closing accounts too soon is kind of bad for your credit. Should she stay or should she transfer?
I would say it depends on the interest rate of all of them. If she moves them all to one with a higher interest rate, it can get quite expensive. I was never a fan of putting a big balance onto another card, but I am not a huge credit card fan. Just remember it will greatly increase her monthly payments of the one she has now if the amount of all she is transferring is big. I am sure somebody who is better with credit cards could give you a better answer! Also think about the fact that if all she does is pay minimum payment it could take up to 40 years (I believe that is the number) to pay it off completely. The companies have it set up for a reason!
It doesn't sound like she owes enough to really bother with doing anything. If she did move anything, chances are the first card has the best rate as store cards are almost always higher. My recommendation would be to move the two store balances over and then close those accounts. They don't make sense if the interest is higher, since the all around card can be used anywhere.
I agree with dconklin. It really depends on the the interest rate of the cards. If she has a card with a really low interest rate, it maybe worth it. A low interest rate can save a lot of money. She will have to do some number crunching to make sure it's worth it.
Watch out for hidden fees. A lot of credit cards charge a big fee for balance transfers. Then you end up finding out that it was hardly worth the effort. Once again, they are in it for themselves, not for you.
Thanks everyone! I advised her against moving the debt too, but forgot about the hidden fees! Now I can show her the forum and give her this extra input! My aunt put this nutty idea into her head. *Sigh*
Transferring balances is only viable if you have a big credit card debt. Then you transfer to a zero or low interest card and pay off what you can while the deal lasts. In your mother's case, I'd advise her to pay off any extra she has each month on the store card, as that's likely to deliver the highest interest rate. Even a few pounds or dollars over the minimum payment can significantly reduce the debt and the repayment time.
