Which is better: fewer credit cards with high balances or more cards with low balances?

Question

My husband and I have several thousand dollars in credit card debt spread over 10 cards each that still has available balances. Is it better for us to leave it this way or to consolidate those balances so we have less credit cards even though those cards will then all be maxed out? I'm just wondering which is better from a credit reporting/ credit score perspective. Also taking an equity loan or line of credit isn't an option.

Answer 1

I am going through the same issues. My banker explained that it would be better to have fewer maxed out cards as opposed to having a bunch with a balance. Credit card companies look at you as a possible liability if you have unused credit card balances. You have the "ability" to max all of them. I hope this makes sense.

Answer 2

It's probably better to have fewer cards, because having too many cards makes it look like you just apply for a new card whenever the old one gets maxed out (so instead of managing your debt, you're running from it).

If the company will let you, try to roll all the balances onto the card with the LOWEST interest rate. Then cancel all the other cards. You should make it your number one priority to pay off this debt, because that it the major thing that's killing your credit. Don't charge anything unless it's a real emergency; you and your husband should limit yourselves to a cash-only basis until you get out of debt.

Call the American Consumer Counseling Center - unlike a lot of those "debt solution" places, this is a non-profit and won't take your money. They can give you some great counseling and advise you on the best options for your particular situation.
American Consumer Counseling Center
http://www.consumercredit.com/ or 1-800-769-3571

Also, get down to your local library tonight and start checking out personal finance books - they can be wonderfully empowering and inspiring, and most are written in simple, easy-to-understand terms.
-The Complete Idiot's Guide to Personal Finance in your 20s and 30s
-The Complete Idiot's Guide to Managing Your Money
-“Smart Couples Finish Rich” by David Bach
-any Suzy Orman books

Answer 3

Fewer with less owed....but in actually credit score wise the less you owe on an account with more room to purchase as in not maxxed out or near , the better. If you have a line of credit say $2000. and you owe 300. is better than same line of credit and you owe 1500. Store credit cards up your score as major cards( M/c , visa...etc) lower score.The less you owe but have available credit in good standing with the better your score.

Answer 4

More cards with low balances is better. If you have maxed out credit cards that is looked at as a huge negative.

Answer 5

I know consolidation is better because whial the ballence doesnt change you pay less in fees and service charges, so 10 cards at $29.95 is far worse than 3, as far as credit status
i think its total debt versus house hold income so i dont think it will change but i could be wrong

Answer 6

Keep it that way. Your credit score will be hurt if you have a lot of cards with high balances.

Answer 7

I suggest you leave the cards alone, and pay them off as soon as possible. No one needs that many credit cards. Besides, in the long run, cash is much, much cheaper.