Everyone has felt the pinch of having too many bills to pay. It doesn’t necessarily mean you have too much debt, it could mean you simply have many small cards and loose track of them. Credit card consolidation can help with that.

Consolidation is the process of acquiring a secured line of credit, usually a personal loan, sufficient to cover the pay off amount of all your credit cards and paying them off. You have one payment that is usually significantly smaller than your combined credit card payments. Your credit cards are still active unless you choose to close the account at the payoff.

For many people the question is when to consolidate. A good indicator is the amount of available credit on your cards. For instance, if 3 out of 4 of your cards have little or no available credit, then you should definitely consider consolidating. At this point, you also want to consider eliminating some of you credit cards. Credit card consolidation offers no real benefit in this case unless you are willing to change your spending habits.

Some people have five or more credit cards with small credit lines. You can consolidate these cards under one major card. By transferring the balances to a card with a higher limit, you will eliminate payments and have less to keep track of. Keep in mind though that all credit cards have high interest rates. Most have high late payment penalties as well as over limit fees. If the reason you are consolidating is to strengthen your credit as opposed to reducing the number of payments, you probably want to go with a personal loan. Remember, once you’ve cleared the balances on the cards, you need to eliminate some of them or you will just need to repeat the process again in a couple of years.