If I consolidate my credit cards can I still use them?

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You can still use credit cards after you consolidate your debt. Consolidating credit cards means you move all of your debt to one account, which resets your credit limits. Once your credit card balance is zero, you can still use it as long as you don’t close the account. But if having it open will tempt you to rack up more charges, then closing it may be beneficial. 

What Is a Debt Consolidation Loan?

A debt consolidation loan is an installment loan that offers enough money for you to pay off all outstanding loans or credit card debt. Many people use a home equity loan or personal loan to consolidate debt. 

Unfortunately, 40% of Americans have been in credit card debt for more than 5 years due to high interest rate.¹ But if you’re able to get a personal loan or balance transfer credit card with a lower interest rate than the credit card APY, then you could save money. Plus, consolidating your credit card debt into one new loan is much easier to manage. It may help with your monthly budget to only focus on one loan payment instead of several. 

If you have a decent credit score, then you may be able to get a good interest rate. And since credit card interest rates tend to be higher than rates from banks and credit unions, this could save you some money. Even if you can’t get a better interest rate, there’s still some benefit to credit card debt consolidation. For example, an extended repayment plan could result in lower monthly payments.

What To Do With Credit Cards After Credit Card Consolidation?

Once those credit cards are paid and you report credit card consolidation on taxes, you can leave the accounts open with a zero balance. Unused credit cards tell the credit bureaus (the companies that determine your credit score) that you have credit available but you’re not using it. This makes you appear financially responsible and could potentially raise your credit score. 

This is called your credit utilization ratio. It’s the measure of how much credit is available to you, versus how much you’re actually using. But as we mentioned, if leaving these credit accounts open will just lead to more credit card debt, then it’s probably wise to close them. It may not be worth the slight credit score increase if you’ll be too tempted to use those cards in the future.

CreditNinja: Why You Should Consolidate Credit Card Debt

Consolidating credit card debt could help you reduce your financial stress and save on interest fees. There are various debt consolidation loans to choose from, but keep in mind that some options are more affordable than others. 

If you’re looking to increase your financial literacy, check out the CreditNinja Dojo. Learn what credit counselors do, how to avoid a late monthly payment, if you can borrow from your pension, and much more! CreditNinja is here to provide accurate and helpful financial articles. 


  1. Jaw-Dropping Stats About the State of Debt in America │ Yahoo Finance
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