Question: What’S The Catch With Balance Transfers?

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

In some cases, moving a credit card balance onto another card (known as a balance transfer) makes good financial sense, because it can simplify your payments and may help you save on interest charges.

However, sometimes paying one card off with another can lead to more financial problems..

Is it better to do a balance transfer or get a loan?

Personal loans can be great for consolidating high balances, or many different balances. … Meanwhile, when you transfer a balance to a credit card, you’ll only be required to make a small minimum payment each month. You can use personal loan proceeds for more than just transferring or consolidating credit card debt.

What is the advantage of balance transfer?

The major benefit of a credit card balance transfer is that it offers you the opportunity to save big bucks. Balance transfers featuring zero percent offers are especially nice, but even a low-rate balance transfer can save you money if your current credit card interest rates are moderate or high.

Can I keep transferring credit card balances?

You can generally transfer balances from as many cards as you like, as long as you stay within the new card’s credit limit. This sounds like a no-brainer, but keep in mind that most balance transfer offers involve a fee for moving the balance from your old card.

What credit score do I need for a balance transfer?

Issuers of balance transfer cards typically require a good or excellent credit score to qualify, which is 670 or higher on the 850-point FICO credit scoring scale. But there are ways to get a lower interest rate if you’re hoping to pay down credit card debt.

Do balance transfers hurt credit score?

The balance transfer itself doesn’t influence your credit score. But keep in mind that credit scores may look at your per-card credit utilization as well as your overall utilization. So if the credit limit on your new balance transfer credit card is lower than the limit on your old card, your score could be affected.

Why are balance transfers bad?

A balance transfer may lead to your scores dipping in the short term. That’s because you’ll decrease your average account age and increase the credit utilization on a single card. But your credit could rise again with careful use.

How does a 0% balance transfer work?

The 0% APR balance transfer is the best of all balance transfer promotions because it means you won’t pay any interest transferred amount until after the promotional period. Qualifying for a promotional balance transfer offer usually requires you to have good to excellent credit.

What happens to old card after balance transfer?

The card issuer transfers funds: Once your transfer application is accepted, the card issuer will typically send a check to the old credit card or loan issuer. 2. The debt moves to a new issuer: You now no longer owe the balance to your old creditor. Instead, you owe it to the issuer of the balance transfer card.

What is the best credit card for balance transfers?

Best Balance Transfer Credit CardsCiti® Diamond Preferred® Card. Best balance transfer credit card for balance transfers. … Bank of America® Cash Rewards credit card. … Citi® Double Cash Card. … Citi Rewards+℠ Card. … Wells Fargo Platinum. … Wells Fargo Cash Wise Visa® card. … Citi Simplicity® Card. … U.S. Bank Visa Platinum Card.More items…

Is there a downside to balance transfers?

Cons of a Balance Transfer You could end up with a higher interest rate if you don’t qualify for a promotional interest rate because your credit score, income, or existing debt. … Balance transfers can get expensive considering the balance transfer fee and the annual fee if the new credit card has one.

Is it worth doing a balance transfer?

Bottom line: “If you’re able to pay off the balance transferred before your interest-free period ends and the balance transfer fee is less than the amount of interest you would pay on the original card, then transferring is worth it,” says Robinson.

Do balance transfers count as payments?

A balance transfer counts as a payment on a credit card as long as it is received and cleared from the date on which a statement is generated to the payment due date and the amount of a balance transfer is at least equal to the minimum payment amount.