Can You Combine Credit Card Accounts?

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Opening a new credit card can be an exciting opportunity, with the chance to earn a welcome bonus worth hundreds of dollars, great introductory financing on purchases and balance transfers and other valuable perks. On the other hand, carrying a lot of credit cards can mean paying more annual fees and not maximizing card benefits.

If you are not taking full advantage of your credit cards, you might want to consider combining your accounts. You can combine credit card accounts from the same issuer to preserve your credit limit with them while streamlining your finances. Here are the advantages and disadvantages to be aware of before you make the move.

How Combining Credit Card Accounts Works

Although card issuers don't really advertise it, many allow customers to combine credit card accounts. Doing so is different from opening or closing a card, and can be worthwhile in a number of ways.

Combining credit card accounts means that you consolidate your line of credit if you have several credit cards from one issuer onto the one or two cards you choose to keep open. Let's say you have four cards with one bank but are finding the annual fees too high or the payment schedules too complicated to manage. You can call your issuer and ask to combine your accounts but keep your total credit limit from all the cards rather than simply closing the cards you no longer want and losing out on their credit limits.

Just because you want to combine credit card accounts doesn't mean your issuer will allow you to do so. The bank will take stock of your overall financial profile, your credit usage and payment record, and other factors to make a decision. If you have not managed your credit cards responsibly (such as carrying large balances, making late payments, and opening and closing accounts frequently), your issuer might suggest closing the account you no longer want once it is paid off in full, rather than allow you to combine your accounts.

If you do decide to combine your credit card accounts, it's important to ask your issuer to uphold or even raise your combined credit limit so as not to impact your credit score. Let's say you have two cards with the same bank—one with a $5,000 limit, and the other with a $10,000 limit. When you consolidate your accounts, ask to keep your entire $15,000 limit (or perhaps even go higher). If your total credit limit is reduced when you combine cards, this could cause your credit utilization ratio to rise and hurt your credit scores.

Benefits of Combining Credit Cards

There are several benefits of combining credit card accounts.

  • Tracking your finances: More credit cards means more balances to track and more statement dates and deadlines to juggle. By consolidating your credit cards, you can manage your spending and payments more easily, which can also reduce your risk of accidentally missing a payment and racking up late fees and interest.
  • Lowering your annual fees: Combining credit cards can also help you avoid paying annual fees on the ones you don't keep. That's an especially good strategy if there are cards with benefits you are not using to their fullest.
  • Preserving your credit score and limit: Unlike simply closing a credit card, combining your accounts will usually preserve your total line of credit with the issuer, as well as the average age of your accounts. It's important to do so because those are two key factors in determining your credit score.
  • Fewer cards, more spending power: By combining your credit limits from several accounts onto a single card, you can boost your spending power with the one you keep, and make it easier to charge large purchases.
  • Consolidated payments: Combining credit card accounts is also a chance to merge balances you might be carrying with your various cards and concentrate on paying down the outstanding amounts.

Drawbacks of Combining Credit Cards

Before you reorganize your wallet, beware the drawbacks of combining credit cards.

  • Missing out on special financing: Make sure you keep the card with better financing options (fewer fees on balance transfers, lower APR on purchases and the like) so you don't end up paying more for these options if you need them.
  • Balance transfer charges: Let's say you are carrying a balance on the card you wish to close when combining it with another account. If you want to take advantage of a balance transfer in order to move your payments to the card you're keeping, make sure you understand any fees the transfer will incur—such as 5% or 3% per transaction (or $5, whichever is greater)—since they can add up fast depending on how much money you're moving around.

In the same vein, if the two cards you combine don't participate in the same rewards program (even if they're from the same issuer), you could end up losing any rewards you've earned but haven't yet used from the card you get rid of.

How Does Combining Cards Affect Your Credit?

A common misconception about combining credit card accounts is that it will magically lift your credit score. That's because some folks think the number of credit cards you carry negatively impacts your score. However, factors like how much of your credit you are using and whether you are making payments on time are much more important. In fact, carrying more cards and having a higher overall credit limit can help your credit score if you manage the cards responsibly and keep balances low.

Alternatives to Combining Credit Cards

Combining credit card accounts might not always be an option. In those cases, here are some of the other actions you could take.

Downgrade to a Cheaper Option

You might be able to downgrade to a different credit card from the same issuer while hanging on to your credit line and account age.

Ask for a Fee Waiver

If the main reason you want to combine credit card accounts is to avoid paying too many annual fees, contact your issuer and simply ask to have them waived. It won't always work, but it never hurts to ask.

Close the Card

Finally, you can always simply close a credit card account. This can negatively impact your credit score and cut off a line of credit that might come in handy later. However, if you are absolutely sure you want to close your card, your account is in good standing, and it is not significantly older than the other cards you have, this is an option.

The Bottom Line

There are lots of reasons you might want to combine credit card accounts. It can help you keep better track of your finances and payments, lessen the annual fees you pay each year, and help you maintain a healthy credit score. There are some drawbacks and limitations to be aware of, but consolidating your credit cards can be a savvy strategy for staying financially secure and focusing on the rewards you want. Before making any decisions, check your credit report and think about how doing so might influence your credit score and your finances in the future.

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