Do balance transfers hurt one's credit rating or have any other negative effects?

Question

I've always paid off my credit cards in full every month, but will almost totally wipe my savings account if I pay this month in full due to some unusual extra expenses. So, I'm considering paying half of the full amount and transferring the rest to a new credit card I recently got, but am wondering about the ramifications of doing so. (I've never done a balance transfer before.) My understanding is that transferring the balance would pay off the old one and then I'd have at least another month (without interest) to pay the rest of this month's expenses. Am I correct on all this? And more importantly, how would this affect my credit rating? Thanks

Answer 1

Transferring balances to a low interest credit card is a widely prevalent practice. But, is every available balance transfer credit card the same? A good look at the offers and you will find that some of them surely standout from the crowd. What makes them different and more lucrative? Here are 5 factors that will help you select a balance transfer credit card that will prove more beneficial than others.

1. Earlier it used to be 0% Intro APR on balance transfers for a specified period, but now it is gone. It is very rare to find a balance transfer credit card with 0 % Intro APR. So, the next best thign is a low APR for balance transfer. There are many credit card which offer balance transfer at APRs ranging from 4.5% to 7% for a limited period and a regular APR after that.
2. It is good to have a low APR balance transfer but if a credit card offers a low APRon balance transfer for a very short period of time, it is better to look for another. Low balance transfer APR for the life of balances is a good option to have. Read more from: http://www.credit-card-gallery.com/credit_card_balance_transfer.html

Answer 2

You're right, but pay it off in full or really soon or your interest rate on the card you did the transfer to will skyrocket. And I'm not sure about the credit rating thing, I've done balance transfers before but it never hurt my score though.

Answer 3

You are but there may be a fee for using the transfer method. Figure how much of the CC debt is regular expenses and how much is unexpected? Payt the full reg. expenses and only a portion of the unexpected. Creditors like to see you show an ability to make reg payments and handle the unexpected. In other words, your spending habits can be read like a book by someone who knows what to look for.
Savings should not be touched as you never know what dilemma will befall you next month. At my house savings is just that, savings!! Not to be used lightly.

Answer 4

Keep playing with snakes and your gonna get bit.
I'd cut up all the credit cards. Pay what you can this month and the rest next month. Then start saving for an emergency. Six months worth of expenses. After that save your money and buy with cash. thats how you win with money. If you play the credit card game the banks gonna win.

Dont worship at the alter of the almighty fico score ( I Love Debt Score)!!

check out daveramsey.com and listen to his talk radio show. Lots of good advice on money and debt.

Answer 5

The only things that could affect your credit rating is missing payment and late payment. Transferring your credit card balance would not hurt your credit. So don't worry about it.

Answer 6

The balance transfer takes time and you won't get a grace period on the new card so unless you get a zero percent offer you won't save money. Go ahead and use your savings you can charge groceries until you have enough to pay off the groceries and rebuild your savings.