Do balance transfers affect your credit score

One can save much by just moving your debt fromhigh-interest credit card to a lower-rate card. Using a balance transfer creditcard can be a smart decision when you are planning for a debt reduction plan,but a question arises in mind do balancetransfers affect your credit score. We will say no, although you may get hurtslightly but not directly and in long run, it will be beneficial for you.

With a balancetransfer option, one can easily pay-offdebt by getting a new credit card and keeping the cost of finance at the lowest possible level. Consequently, it willcost you a few bucks to move-on with yourdebt and you can pay more debt while skipping extra interest.

It’s important that you must know how balance transfer hurtyour credit score or it is better to say whether it affects your credit or not.

Balance transfer doesn’t affect your debt amount: This meansthat if you owe $10,000 to one credit card company and transfer it to a new card, you still have to pay the whole amount back. But what actually getsaffected is your interest payment/amount on your debt which one has to pay on theremaining balance.

Balance transfer can’tdo anything to your old account: Your old account from which you aretransferring balance will always show in your credit report. This means if youhave any bad history associated with that balance transfer can’t clean that.Moreover, accounts which you close with a badreputation can still show for up to 7 years in your credit report while luckilyaccounts with a good reputation can stayfor 10 years.

In short, balance transfers can’t impact your credit historywhich you already have in your past. However, it can straightforwardly help you out to build your credit and improveyour scores in the long run.

Using balance transfer for saving

A balance transfer must have to do some saving for you. If it’s not providing you a reasonable amount tosave then it doesn’t make any sense to move on.

Let’s suppose that you carry a balance of $5,000 on a cardon which you have to pay 10% interest overcoming6 months. If you go with the above optionyou have to pay around $260 in interest. On the other hand, if you move this balance to 0% balance transfer credit cardyou can simply save that cost. However, sometimes bank may charge a fee onbalance transfer which typically ranges from 3% to 5%. Still, it’s worth that you move with balance transfer cards.

Did balance transfer helpful for credit score

You must know that everysingle dollar you pay for interest can be used to pay off your debt. So, using balance transfer can reduce your debtquickly and it will strike your score positively. In the long run, this act can also benefit creditutilization ratio in long run.

After successful approval for a new credit card, you mustknow about usingand managing a credit card to avoid any penalties. After you get your newcard you must try to keep your credit limit usage below 30% at the end of eachmonth.


If you think that performing abalance transfer is going to improve your credit score like magic then, unfortunately, it will not be. Evenrepeated balance transfers can’t help you out to strongly hit your credit.

However, a better way to move credit score is to use a balance transfer to cut-down your debt. Youmust keep your credit utilization in good standing in the overall term of yourcredit transfer. This strategy works absolutely however, it’s a long-term planbut the impact is withstanding over time.