How Does a Balance Transfer Affect Your Credit Score?

Monday, March 16th, 2020
Updated: March 16th, 2020
The content is accurate at the time of publication and is subject to change.

If you have one or even several credit accounts with considerable balances and huge interest, probably, considering a balance transfer to consolidate those debts is the best way out. But before you apply for a balance transfer credit card, it’s not out of place to assess all possible pros and cons. And, first of all, it has to do with your credit score. The card you choose, the way you will use it and some other factors can impact your score and either increase or decrease it.

How a Balance Transfer Credit Card Can Improve Your Credit

If you find the right balance transfer offer, it will play into your hands for a long time afterward. Some cards may favor you not only with a 0% intro APR for balance transfers, but also with a $0 annual fee, great rewards program (which is especially precious if you plan to use the card after paying off the transferred sum), and some other useful services and features. Another not less valuable benefit the card can bring you is your credit enhancement. That’s what you can expect:

  • Lower overall credit-to-debt ratio. First, a new credit card in your wallet decreases your entire debt amount compared to your total available balance. This correlation is called credit-to-debt ratio or credit utilization ratio and makes up 30% of your FICO score. It is recommended that your outstanding debt does not exceed thirty percent of your available credit. The lower, the better.
  • New credit factor. The very fact of opening a new credit account stands for 10% of your total FICO credit score. So, a new balance transfer card can be especially good for credit building in case you haven’t opened any accounts for a long time.
  • Delinquencies removal. If you have late payments on current credit cards or loans, a balance transfer will deliver you from them. Although this does not immediately put them away from your credit reports, at least they will no longer press you and accumulate unnecessary interest. Moreover, timely payments on the new card can help mend your credit history.
  • Easier payments. A balance transfer card combines your payments into one. This rather facilitates the process of managing your debt. Having only one monthly due date, you have fewer chances to forget about and miss the payment. Such improvements in financial behavior will lead to faster debt repayment and a gradual increase in scores.

How a Balance Transfer Credit Card Can Worsen Your Credit

It may seem so easy to transfer burdensome balances to a new card. Especially if it offers a 0% intro APR and a low balance transfer fee. Still, be careful. Some pitfalls may make your life even harder and damage your score. Here is what you’d better note beforehand:

  • Higher credit-to-debt ratio on the new card. Even though, as it was mentioned above, your overall credit-to-debt ratio will decrease, still, once you transfer balances from your old accounts to the new one, your credit-to-debt ratio will increase on this new card. It’s not difficult to guess that it, on the contrary, will affect your score in a bad way.
  • Shorter credit age. Likewise, a point regarding a new credit account may be controversial. When a credit card issuer opens an account in your name, the average age of your credit accounts changes down. Thus, the length of your credit history becomes shorter and decreases your score accordingly. This factor forms 15% of your total credit score.
  • Insufficient credit limit. Not always a new issuer will approve you the whole amount that you need. In this case, you will simply not be able to transfer all the debt. Thus, you will have to pay both a new card and the remaining debt on the old accounts.

To Apply or Not to Apply?

Getting a balance transfer credit card can definitely have a positive impact on your credit score with the lapse of time if you do everything right. In case your current credit cards charge you giant APRs and fees making it impossible to get even an inch closer to debt reduction, then we would recommend you apply without hesitation. Firmly adhering to the payout plan and keeping healthy financial habits, you do not risk seeing your scores dropping. Be a responsible cardholder and don’t get trapped again with new debts. If the balance transfer credit card you choose has a 0% intro APR period, try your best to meet this deadline.

It is also a good decision not to cancel your old credit accounts after the transfer if they do not have large annual fees. Just keep them open but don’t use. The open credit cards will help your credit age stay high and maintain your credit-to-debt ratio low.

All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.

Latest Balance Transfer Cards Guides

How to get rid of your current debt? May 23rd, 2023

Effective ways to consolidate your debt. Trying to pay off debts is tough, especially if you have several debts with steep interest rates. Debt consolidation is something you might want to think about in order to streamline your debt and cut down on your monthly payments. Debt refinancing is the process of taking out a […]

Continue »
Do These 3 Things After a Balance Transfer to Maximize Your Savings December 25th, 2020

After requesting a balance transfer, it usually takes about 14 days before the actual transfer is completed. However, receiving the long-awaited message from the card issuer that your funds have been successfully transferred is not the final step. After this, it is very important not to forget about some important things you better do so […]

Continue »
Got a Balance Transfer Credit Card Denial? Here Is What You Can Do April 14th, 2020

Once you understand you are carrying balances on one or several credit cards under huge interest that you cannot pay off quickly, it may be wise to consider transferring those debts to a new balance transfer credit card. Most such cards come with a 0% intro APR on balance transfers for 6-21 months, which can […]

Continue »
5 Easy Steps to Fulfill a Balance Transfer February 5th, 2020

Once you decide to apply for a balance transfer credit card in order to consolidate all your debts, get lower interest rates or earn more rewards, you most likely begin to wonder how to accomplish the whole balance transfer process and benefit from it. Let’s start with the basics.

Continue »
How To Choose A Balance Transfer Credit Card January 15th, 2020

Balance transfer card is definitely the best credit card for reducing your debt. Such a card allows to consolidate your high-rates loans and credit cards and pay off the balance at a lower interest rate or even 0 interest rate during a limited introductory period.

Continue »
Best Credit Offer
Best Credit Cards from
Check off the cards you want to compare. Then click the Compare link to go to the comparison table.
Consumer Rating: 4 / 5
Horizon Card Services Group One Freedom Card
Copyright © 2001-2024 All Rights Reserved.

See the credit card's terms and conditions on the online application page. Note that this website may be compensated by credit card issuers when the visitor applies for a card through the links on this website. We do our best to maintain all information accurate and up to date. However, we do not warrant the credit card information won't change. Click the "Apply Online" button and review the current info on the secure credit card terms page.

Information in these articles is brought to you by Banks, issuers, and credit card companies mentioned in the articles do not endorse or guarantee, and are not responsible for, the contents of the articles.

The webpage is a free service and an information resource for credit cards and financial products and services available to eligible United States consumers. does not offer any warranties and is not a direct service. There are no guarantees for approval or offers when applying for a credit card. Please refer to the application if you would like more information on each credit card. When you click "Apply" for a particular credit card, please take the time to review the terms and conditions of the product/service at the issuer's website. All logos on the website are property of their respective owners.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer. Opinions expressed here are the author's alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. Reasonable efforts are made to present accurate info, however all info is presented without warranty. Consult a card's issuing bank for terms & conditions. makes every effort to keep information up to date and accurate. However, the information regularly changes and is presented without warranty. Therefore, we strongly recommend all our readers to visit the credit card application page by clicking "Apply Online!" button to review the detailed credit card's terms and conditions. Note that may be compensated by the credit card issuers when the readers apply for a credit card through this site. is an independent, advertising-supported website which receives compensation from the credit card issuers and companies whose offers appear on the site. Compensation may impact how and where products appear on our site, including, for example, the order in which they may appear on the site pages. does not review or list all available financial or credit offers.

You've successfully subscribed!

Please specify the following:All these fields are optional

Thank you for providing this information! We will make sure our letters are useful for You.

User Generated Content Disclaimer: These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.