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.