If your wallet is full of plastic and your mail is full of bills, it might be time to organize your credit cards. In fact, if you are carrying quite a bit of debt, consolidating to a lower-rate card can save you a hefty chunk of change in interest charges. But done incorrectly, canceling credit cards or consolidating debt can cause more harm than good.

Do you need to consolidate?
Decide what you want to achieve with consolidation. Do you want to lower your interest rates? Do you want to lower your monthly payments? Or just stretch out the terms on your loans? If it's one of the last two, tread carefully.

"If you really want a get-out-of-debt-free card, you've got to understand how you got into the mess and fix the mess," says Wayne Bogosian, co-author of "The Complete Idiot's Guide to 401(k) Plans."

"People solving symptoms with debt consolidation are on the verge of making the problem worse," he says.

In short, don't consolidate your credit cards just to charge them all back up again.

Which cards to keep?
If you do decide it's time to reduce the number of cards you have, you should determine your credit needs. How you are using your cards will determine whether it makes sense to consolidate the balances.

Do you have multiple department store or gas cards that you never use? Are you paying a yearly fee for a credit card that allows you to earn miles? If so, do you plan to use those miles? Consider how many points you earn and if it's worth the fee you pay.

Follow these steps
Ultimately most people really need only two or three multipurpose credit cards.

To consolidate your balances onto fewer cards:

• Pay off any low-balance cards you will not be keeping, and then close the accounts. • Transfer the remaining balances to the card with the best interest rate. Don't use this card until it's paid off. This will avoid additional interest charges on revolving purchases. Once the balance is paid, close the account. • Choose the two or three cards you are going to keep, and be sure they have limits high enough to cover your monthly charges. Close the others, and be sure to pay these off in full each month.

How to transfer a balance
Before you transfer that hefty credit card balance, read the fine print on your credit card agreement and ask questions. Otherwise, you could end up paying fees and a much higher interest rate than you expected. Many of the answers to these questions can be found on your credit card statement. If you cannot find the answers to these questions, call your credit card company and request a copy of your credit card agreement.

Ask these questions:

1. How long does the current rate last?
2. Does the current rate apply to transferred balances or new purchases or both?
3. Does the card have an annual fee?
4. What about late fees and over-the-limit fees?
5. Are there balance-transfer fees? (Some issuers charge transaction fees as high as 4 percent. So the higher that balance, the higher the transaction fee. A 4 percent fee on a $5,000 balance would cost $200).