Significance

• Consolidating credit card debt onto one high limit card is not a long term solution for debt, but it is a superb intermediary tactic that will help you build up the savings to pay off large debts. Many cards have low introductory interest rates that give you plenty of time to pay off large balances without needing to pay high interest or fees. This provides a great opportunity to transfer the balance on many high interest credit cards to one high-limit card with a low rate.
  
  

Function

• Getting approved for a high-limit credit card when you already have several outstanding lines of credit is not always easy, particularly in today's tighter credit environment. If possible, pay down as much of the existing debt as possible to improve your chances of being approved for the card. Consider taking out a personal loan at a low interest to help pay down the debt to improve your debt to income ratio--an important number that all credit card companies look at when deciding whether or not to approve you.
  
  

Features

• Consolidating existing debt onto one credit card can have many side benefits. You will pay less in annual fees, you'll be at less of a risk of being overwhelmed by rate changes and hidden charges, any rewards programs will be easier to keep track of and you'll be able to access customer service more conveniently. It also cuts down on the amount of time that you need to spend each month paying your bills.
  
  

Effects

• Having all of your debt consolidated onto one card is also more attractive to lenders, as they tend to look poorly upon borrowers who use more than three to five credit cards at once. If you are planning on utilizing credit consolidation to help pay down your debts, it will also help to improve your rating in the future. Cards with high limits are also easier to increase the limit on as long as you meet your payments on a regular basis.
  
  

Potential

• Even if complete credit consolidation is not an option, even partial consolidation can provide substantial debt relief. The best way to handle this is to transfer the balance of a high interest card to another one with a low introductory fee--and then to close out the old card. It can be very tempting to make use of all of your available credit if that has been your habit in the past. Work to change that habit by keeping your total available credit either constant, or try to bring it down if your goal is to get out of high interest credit card debt.