Many people get into the habit of having several different credit cards with small credit limits, possibly from when they began to establish or re-establish credit. Not only does this cause your payments to be higher, but your interest payments may be as well especially if you have several high interest low credit line credit cards. The inconvenience of transacting business this way makes it more feasible to take those small credit line balances and apply for a card with a higher credit line and lower interest rate. If you have established your credit for at least a year, it shouldn't be difficult to find a credit card with a credit line high enough to allow you to have fewer cards by transferring the balances on the cards you have to another one.

When you consolidate your credit cards, you want to be careful as well so that you don't take something with a higher interest rate in order to have the freedom to make balance transfers at a low rate. For example, you may find a card with no interest on balance transfers for the first six months but which has a higher overall interest rate than any of the cards you consolidate. It's essential to look at all of the angles and choose the one that is the cheapest in all ways. Card issuers use balance transfers to lure customers in to their programs and then raise the interest rates substantially when the introductory period is expired.

Sometimes choosing cards with an introductory rate on balance transfers is not in your best interest. For example, if you are paying on several cards at an average rate of 19.9%, the 3% balance transfer fee that most card issuers charge is minimal if you're accepting a card with a 9.8% interest rate. The key is finding a card with a lower interest rate that is going to be beneficial to you as a card holder. Paying a one-time 3% transfer fee from a card with a 19.9% interest rate to one with a 9.8% interest rate is certainly in your best financial interest.

In order to avoid these situations totally, develop the habit of paying off your credit cards each month and applying for cards that have a lower interest rate initially. Even if you are establishing or re-establishing credit, there are card issuers who offer lower interest rates on small credit lines with regular credit line increases. Look for the offers on those kinds of cards instead of taking high interest ones and looking to consolidate later in order to save money on interest payments and monthly payments.

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Michael writes for Card Sense where you can compare credit cards including those with a 0% balance transfer facility.