Credit Card Balance Transfer – pay off your debts with ease

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Transferring your balance to a low rate credit card can help you pay off your debts with ease. Some credit cards even come with promotional offers, giving you the breathing space you need to pay your debts. However, there are some disadvantages of credit card balance transfer that may never cross your mind. Are you planning to transfer your balance to another credit card? Here are a few pros and cons you should be aware of;

Credit Card Balance Transfer

Pros of Credit Card Balance Transfer

  • Move your balance to a lower rate: If you currently have some balance on a high-interest rate credit card, transferring a balance to a credit card with a lower interest rate will give you a chance to reduce your credit card balance drastically. Since you’ll have a lower interest rate and possibly no finance charges, more of your monthly payment will go toward reducing your credit card balance, instead of towards interest.
  • You may even be able to pay off your balance completely by the time the promotional period ends.
  • You can move your balance to a credit card with better terms. If your current credit card has bad terms – high fees or a short grace period, for instance – you can move your balance to a better credit card and close out your old credit card account for good. The new credit card may even offer credit card rewards on your new purchases.
  • You can consolidate your credit card debt, leaving yourself with fewer credit card payments to make each month. Moving multiple credit card balances to a single credit card (given it has a high enough credit limit) can eliminate the hassle of making multiple credit card payments to several different credit cards. It’s easier to pay off one credit card balance than it is to pay off several.

Cons of Credit Card Balance Transfer

Here are the potential downsides of transferring a balance to a new credit card, even with a balance transfer offer.

  • You could end up with a higher interest rate if you don’t qualify for a promotional interest rate. Not everyone qualifies for the promotional interest rate. You typically must have an excellent credit score to get a low-interest rate balance transfer offer. Otherwise, you’ll only qualify for the regular (higher) balance transfer interest rate.
  • Balance transfers can get expensive considering the balance transfer fee and the annual fee if the new credit card has one. Before you transfer the balance, make sure you factor in the full cost of moving your balance and compare to the interest you would pay if you left your balance on your old credit card. Leaving your balance on the old credit card may cost less in the long run.
  • A balance transfer could affect your credit score. Applying for and opening a new credit card account can affect your credit score. Not only that, your credit score takes a hit anytime you have a credit card with a balance that’s above 30% of the credit limit. If you move your credit card balance to a credit card that doesn’t have enough available credit, your credit score could drop. Nonetheless, you can recover lost points by reducing your balance with timely credit card payments each month.
  • You’re at risk of more debt. Once you transfer your balance to a new credit card, you suddenly have more credit available to you. This gives you the potential to make purchases on your old credit card. If you do, you will end up with more debt than you started out with. It’s wise to close the old card completely if you can do without it.


Having considered the advantages of transferring your balance to a new credit card, you need to also consider how transferring the balance will affect your finances in the long run. If you will ultimately save money and pay off your credit card balance faster, then transferring the balance is worth it. Making full payments on time will not only save you money, it will also have a positive impact on your credit score.

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