Credit card balance transfers are often great ways to save money. When you transfer your credit card balances to another credit card it is important to keep in mind that every single transaction has the potential to negatively impact your credit score and credit report. Following these tips will help you transfer your credit card balances without lowering credit score.

Transferring Credit Card Balances

To transfer credit card balances without lowering credit score you have to keep your credit report and Fair Isaac Company or FICO score in mind. If your plan is to close your existing credit card account because you don't like the company or your interest rates are too high then you should open up your other credit card accounts first. You need to do this before you close the account that is going to charge the high interest rates. It is important that you do not close your credit card account then open a new one because your FICO score goes down. You need to open the account first if you plan to transfer credit card balances otherwise the new company may not accept you.

Points to Remember About Credit ScoresTransfer Credit Card Balances to Reduce Debt

Only 10% of the FICO score is based on open accounts. The only time it's a good idea to close a credit card account is when you are going to be transferring the balance to another card that carries no balance or that has an available balance that can hold the new amount.

Do the math. Calculate the payments of taking on more credit cards. The goal of transferring credit card balances without lowering credit score should be to reduce your monthly and overall payout to the bank or credit card company. Some people can get into trouble by "borrowing from Peter to pay Paul" in their attitude toward shifting around money. Another focus should be on reducing your interest rates of your credit cards and loans. There are many ways to deal with your current debt amount.

Only use a zero down, no annual fee offer to transfer credit card balances. Depending on your credit score and report (which you should check yearly for free) this can be difficult. Use balance accounts that do not have penalties or fees for transferring accounts. There are typically credit card offers to transfer balances for a limited time for 0%. Make sure to follow the step above and establish new credit before you close your old credit. If you do this then your credit limits remain the same because of the debt to credit ratio. But, once you open up a new account, even if there is nothing on the card, then you have just decreased your appeal to a lender. When they are figuring out how good of a risk you are they figure in how much total debt you can acquire.

Following these steps will help you transfer credit card balances without lowering credit scores and soon you'll be on your way to living a debt-free life. Well, one can hope. Being debt-free should be your goal, but at the very least, living within your means and not taking on too much debt will help you live happier and longer.


Image Credit: Salvatore Vuono