Do balance transfers hurt your credit score? (2024)

Do balance transfers hurt your credit score?

Balance transfers won't hurt your credit score directly, but applying for a new card could affect your credit in both good and bad ways. As the cornerstone of a debt-reduction plan, a balance transfer can be a very smart move in the long-term.

Is a balance transfer bad for your credit score?

In some cases, a balance transfer can positively impact your credit scores and help you pay less interest on your debts in the long run. However, repeatedly opening new credit cards and transferring balances to them can damage your credit scores in the long run.

Why did my credit score drop when I did a balance transfer?

Key takeaways. Applying for a new balance transfer credit card requires a hard credit inquiry, which may lower your credit score temporarily. Your credit score might also drop due to your new average length of credit history or if your per-card credit utilization ratio is too high.

What is one of the biggest mistakes you can make that will hurt your credit score?

Making late payments

The late payment remains even if you pay the past-due balance. Your payment history may be a primary factor in determining your credit scores, depending on the credit scoring model (the way scores are calculated) used. Late payments can negatively impact credit scores.

What is the catch to a balance transfer?

A balance transfer may not save you money on interest if you're not able to pay the balance off before the end of your promotional period. Running up new card balances after completing a balance transfer could also hurt your credit score and leave you with more debt to repay.

What is the downside of a balance transfer?

Yes, potential downsides to balance transfers include balance transfer fees, higher interest rates after the introductory period and the possibility of getting into more debt if you don't manage your spending habits properly.

Is a balance transfer ever a good idea?

A balance transfer credit card is an excellent way to refinance existing credit card debt, especially since credit card interest rates can go as high as 30%. By transferring your balance to a card with a 0% intro APR, you can quickly dodge mounting interest costs and give yourself repayment flexibility.

How long does it take for a balance transfer to clear?

A balance transfer takes about five to seven days after your request before you'll see it appear in the account you're transferring the balance to. But a word of warning: Some credit card issuers can take 14 or even 21 days to complete a balance transfer.

Do balance transfers affect points?

A balance transfer credit card can bring you a bunch of benefits. But if you're wondering whether a balance transfer will earn points toward cash back and other rewards, the answer is no – at least not for most credit cards.

Do balance transfers decrease how much you owe?

Transferring your credit card balance to a new card that offers a 0 percent introductory APR can help you to pay off your debt while reducing the interest you accrue.

What is the number one credit killing mistake?

Mistake 1: Late payments

Not surprisingly, a key way to depress your credit score is by paying bills late.

What is a good credit score?

Although ranges vary depending on the credit scoring model, generally credit scores from 580 to 669 are considered fair; 670 to 739 are considered good; 740 to 799 are considered very good; and 800 and up are considered excellent.

Why is my credit score so low when I have no debt?

Various weighted factors mean that even with no credit, your credit score could still be low because the length of your credit history or credit mix, for example, could also be low.

How much is too much for a balance transfer?

Credit card providers typically determine the amount of debt you can move in relation to your credit limit. Many issuers are generous, giving cardholders the ability to transfer their full credit limit, but in some cases, your transfer limit may be capped at 75 percent of your overall credit limit.

What are the pros and cons of doing a balance transfer?

How does balance transfer work for dummies?

A balance transfer moves a balance from a credit card or loan to another credit card. Transferring balances with a higher annual percentage rate (APR) to a card with a lower APR can save you money on the interest you'll pay.

Which is better money transfer or balance transfer?

A balance transfer card lets you move debt from your credit cards, whereas a money transfer card lets you move debt from your bank account. So, a money transfer card could be a useful option if you want to either: Pay off something that isn't credit card, such as an overdraft.

Can you pay off a credit card with another credit card?

In general, you can't pay your monthly credit card bill using another credit card. If you're set on using a credit card, you might be able to pay with a balance transfer or cash advance, but they can be risky and add to your debt. A balance transfer may offer a promotional period that could save you money in interest.

How much will it cost in fees to transfer a $1000 balance to this card?

It costs $30 to $50 in fees to transfer a $1,000 balance to a credit card, in most cases, as balance transfer fees on credit cards usually equal 3% to 5% of the amount transferred. Some credit cards even have no balance transfer fee, but it's rare for cards that do this to also have a 0% introductory APR on transfers.

Is it smart to pay off one credit card with another?

Pros of paying a credit card bill with another credit card

Lower APR and interest savings: If you're transferring a balance from a card with a high APR to one with a lower APR, you'll save money in interest. This allows you to focus on the principal payment of the card that now holds the entire balance.

Why do people want balance transfer?

A balance transfer can be a good idea to save money on interest charges. Balance transfers work by applying for a new card with a low introductory APR, initiating a balance transfer and paying down the balance. Some cards are good for balance transfers but others are not.

Can I still use my credit card after a balance transfer?

Your old card doesn't automatically close after successfully transferring a balance to another credit card. It remains open and active, minus the debt you've moved to the new card.

Can you just keep balance transferring?

In theory, you can transfer balances between different issuers' cards as many times as you like, but the balance transfer fees may start to eat into any savings a lower interest rate may offer. Is it OK to have two balance transfer cards? Yes, you can have multiple balance transfer cards.

Do you have to close account after balance transfer?

After a balance transfer takes place, your old account remains open. The original card issuer will typically only close your account if you make a request for it to do so. Unless you have a good reason to cancel your old credit card, however, you may want to think twice before you close the account.

How many credits cards is too many?

Owning more than two or three credit cards can become unmanageable for many people. However, your credit needs and financial situation are unique, so there's no hard and fast rule about how many credit cards are too many. The important thing is to make sure that you use your credit cards responsibly.