How Your Credit Score Affects Your Balance Transfer Offers
There is a lot of chatter about balance transfer offers. Which one is the best offer, how to do a balance transfer, how much faster you can pay off debt and how much money you will save by doing a balance transfer are just some of the topics addressed by blogs, financial counselors and advisors.
But if your credit is less than stellar, it will affect the type of offers available to you. On the other hand, if you have excellent credit, you will be swimming in balance transfer offers. Here is a guide to the types of offers you can expect to get, depending on your level of creditworthiness:
- Excellent credit—if you have a credit score in the 700 range or above, the best offers will be available to you. That means 0% APR offers for up for 14 months, 18 months, even 21 months. In most cases, you will still pay a balance transfer fee of 3% for every balance that you transfer to a new card. No-fee balance transfers are rarely found these days, but if you have excellent credit, you are more likely to be targeted for these offers when they come along. Paying a balance transfer fee means you will have a small penalty for transferring your balance, but if you have a big chunk of debt to pay off, it is worth paying that fee to save the interest.
- Good credit—when your score is good or average, you may not be eligible for the longest introductory periods with no interest. However, you will most likely still be able to do a balance transfer. The promotional period may be 6 months or up to 12 months, and instead of a 0% APR offer you may get an offer for 1% or 2% interest. If you are paying a lot in interest on your balances now, that will still be worth doing the transfer. You will save money in the long run. Remember that you will almost certainly pay a balance transfer fee of 3% to 5% to do your balance transfer.
- Poor credit—whether you call it limited, bad or poor, a credit score of about 650 or less will make it harder to do a balance transfer. That does not mean you cannot do one, however. If your current APR is more than 12%, there is a good chance that you can get a card offering less than that, at least for some period of time. Call your credit card company and ask if they will negotiate the rate for you, and if they cannot, then look for balance transfer offers from card issuers for people with limited or poor credit. Do the math and figure out whether transferring your balance will help you pay off your balance faster and pay less interest in the long term.
No matter what your credit score, doing a balance transfer is a great way to pay down your debt faster and save money.
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