Credit Tips: Repeated Balance Transfers of Credit Cards

Posted On: January 1, 2006

archive
Posted: Fri Sep 10, 2004 1:51 pm
Post subject: Repeated Balance Transfers of Credit Cards
Blaine
Date: 3/30/2001 9:22 pm CDT

The interest rate on my card recently jumped to 19.98%. The same day it happened, I received 2 card offers offering 1.9% into rate on balance transfers for 6 months. Questions are:
1. Why shouldn’t I transfer the balance ($5500) to the new card, cancel the old one, then keep transferring after the 6 months are up on the new cards?
2. If I cancel the into cards after transferring, what effect will all these transfers have on my credit report?

archive
Posted: Fri Sep 10, 2004 1:52 pm
Post subject: Repeated Balance Transfers of Credit Cards

Eugene
Date: 4/1/2001 1:19 pm CDT

Why shouldn’t I transfer the balance ($5500) to the new card, cancel the old one, then keep transferring after the 6 months are up on the new cards?

Because you are not guaranteed to qualify for the card with 2.9% APR, not now, not in the future. Because the credit card companies hope you give up, or for some other reason get stuck with higher APR on THEIR card. Because they hope you will transfer a balance while having a higher APR balance on that card and pay more than you think you would. Because they can raise your APR (sometimes even retroactively) if you pay one day late, even to another issuer. Because direct balance transfers between two cards from the same issuer don’t work, and you might not know that. Because you might be lazy or just not care how much the debt costs you. (I am sure I forgot some reasons, there are just so many of them.)

But f course, one thing is what they hope for, and quite another is your bottomline. Transfer the balance, of course.

If I cancel the into cards after transferring, what effect will all these transfers have on my credit report?

The transfers themselves will have very little effect, the new accounts and new inquiries might. Still, significant reduction of cost of debt is worth reduced credit rating. Do not rush to close your old accounts, though, they might offer you some sweet deals to get the lost balance back to their card.