Can Credit Card Balance Transfers Hurt your Credit?
Balance transfers can come at you from all directions. Any
credit cards that you currently have can bombard you with offers
to transfer other balances to that account. They frequently have
a lower interest rate to lure you in.
Balance transfer offers can also come from new companies that
want you to apply for a new card. These offers almost always
feature promotional rates that will go up substantially in a few
months.
It is true that credit bureaus will penalize you for moving
balances around using transfer offers. Exactly how much your
score will drop is a mystery. Nonetheless, the more
frequently you transfer credit card balances, the more it will
hurt your credit score.
If your primary concern is preserving your credit score so
that you can get a lower rate on a major purchase, then you may
wish to limit your use of balance transfers. If you are not
planning to make major purchases in the next several months,
then balance transfers can be a good idea. Despite the temporary
drop transfers can cause in your credit score, they can enable
you to more quickly pay down your principal balances. This will
in turn help boost your credit score.
Your objective either way is to save as much money as you
can. Taking advantage of credit card balance transfer offers can
allow you to lower your overall finance charges and reduce your
debt more rapidly. The long-term gains can justify the
short-term dip in your credit score. If you are ready to become
a gamer and take advantage of your balance transfer offers,
follow these steps to utilizing
balance transfer offers.
Otherwise, there are alternative ways to reduce interest
without using balance transfers. Loans are difficult to obtain
when you have substantial credit card debt. If you are able to
consistently pay more than the minimum payment, then you may
want to consider reviewing
strategies to reduce interest rates with your existing
creditors.
© 2004-2010 Vision Credit Education, Inc. All rights reserved.
Privacy
|
Legal
|
