Arizona residents may not be aware of the best ways to reduce debt. Consolidating debts and cancelling credit cards can help, but if certain precautions aren’t taken, the result could be more harmful to a credit score in the end. It is possible that individuals attempting to consolidate their debt may be close to making their debt problems even worse. Pinpointing what the goal is when choosing to consolidate may help to avoid pitfalls.

When determining which credit cards to cancel, consider if the associated fees are worth it. For example, if an individual holds multiple gas cards, it may be best to reduce those cards down to only one and consolidate the others. If a card offers bonus points every time it’s charged as credit, consider how often the points are redeemed and measure that against how much interest and fees are paid annually.

Before deciding to consolidate to fewer credit cards, it is best to pay off the lowest balances first and then cancel the accounts. The remaining balances can be transferred to the credit card with the lowest interest rate; after the total balance is paid on that card, cancel the account. Select which cards are most beneficial to keep and cancel the others. The average individual may only need two to three cards.

It is always good practice to read the fine print associated with the agreement made with the creditor. Try to identify how long the agreed interest rate lasts, if there’s any annual fees, and the cost of late fees and over-limit fees. Since the process of consolidating debt can be tedious, a bankruptcy lawyer may be able to assist in helping to identify the best methods to settling debts.

Source:, “Organize credit card debt“, Steve Bucci, Dana Dratch and Amy Fleitas, January 06, 2015