Having multiple credit cards can be very rewarding. You get to benefit from multiple loyalty programs and can always find the best deals for the purchases you make. Some credit cards have benefits designed for specific customers; travel or co-branded cards, for example, let you earn more mileage points when you use them to make purchases.

When not managed properly, however, multiple credit cards can quickly become the source of financial problems. Having multiple – and usually big – credit card bills to pay is a problem as it is; not being able to pay the credit card bills on time is even scarier. Before you know it, you have mounting bills that are well beyond your budget.

One of the ways you can stop the vicious circle and start dealing with your credit card problems is consolidation. Using a personal loan or a consolidation loan, it is easy to combine multiple credit card debts into one manageable loan. Before you move forward with this solution, here are 3 things you need to know about consolidating your credit cards.

It’s Not Your Only Option

Consolidating multiple credit card debts is a handy solution to use. You will end up with one loan that isn’t just more affordable, but also easier to repay. However, jumping to consolidating credit card debts isn’t something you want to do either.

Before you consider consolidation as a solution, you want to look into other options first. There are balance transfer deals, prioritization, and other methods you can use to make your credit card debts cheaper and easier to manage.

It is also a good idea to work with your credit card issuers. You can get the interest stopped and your credit card bill converted into a series of fixed monthly payments. You may even earn discounts on your bills, which make settling your credit cards easier.

Know Your Situation

You should also avoid consolidating your credit card debts without first acknowledging that you have problems to solve. Not taking the time to understand the situation you are in – and willingly admit that you have problems to solve – will only lead to more problems in the future.

List all of your credit card debts and their details, including the minimum payment amounts, the payment deadlines, and late charges you have to pay if you miss those deadlines. Start prioritizing credit card debts based on the principal amounts as you go along.

Calculate the total amount you have to pay every month and see if you can actually afford paying them. You can prioritize the smallest credit card bill as a way to solve your credit problems. This means allocating more money towards the card with the smallest balance and paying the minimum amount for the rest.

Once you repay your first card, you can then allocate more money to the next card on your list. It doesn’t take long before you start repaying your credit card bills faster. It is even easier to settle the debts the more money you can allocate towards repayments.

Consolidate the Right Way

As mentioned before, you can use various financing options to consolidate your credit card bills. Personal loans, for instance, can be used to combine multiple credit card debts into one loan. Not only will you benefit from the lower interest rate, you can also extend the loan over a longer period of time to make the monthly payment amount more affordable.

However, you still want to make sure that you are getting the best deal on your quick loan before deciding to use it for consolidating your credit cards. You can save a lot on interest and other charges using discounts and special offers that are currently available on the market.

You also want to close your credit cards as soon as you repay them. Don’t wait; don’t even think about using the credit cards again. The goal is to stop the vicious cycle of multiple credit card debts, and the way to achieve that goal is by closing your credit cards as soon as possible.

One more thing to understand is that you have the power to negotiate a better settlement with the credit card companies. Since you will be paying the balance in full and right away – with the help of your personal loan – you can ask for reductions and discounts when you are in the process of closing your cards.

Bear in mind that credit card companies will offer higher limits, lower interest, and a ton of other promotions to keep you from closing your credit cards. Just say no and you will be on your way to better control over your debts. After all, you only have one loan to worry about and you can manage repaying the new personal loan better when you have no more credit card bills to pay.