Does transfering debt to a 0% APR program hurt your credit score?

Question

About a year ago I transferred about $3000 in debt to a card that had 0% on transfers for a year. Now that the year is coming to a end, I wanted to transfer the remaining balance to another card that has a 0% program on transfers. Does this hurt my credit score if I do this? Keep in mind, when I transfer, I do not use the card for any new purchases.

Thanks!

Answer 1

As long as these transfers do not max out the card you are going to and you are maintaining a low debt-to-limit ratio(under 30%) you will be fine.

However, you have to be really careful about these promotional offers of 0%.  If you are even late by 1 day or go over your limit they have clauses that allows them to cancel the promotional rate and set the 0% to the standard rate.

Also, credit card balances are not First In First Paid, most cards will apply the payments to the lowest interest rate balance first.  So for example if you have $500 on the credit card at 9% interest and transfer the $3000 over to the same card at 0%.  That $500 will continue to be assessed interest until you have the $3000 totally paid off.  This is why if you do this you should have a 0 balance on the card you are doing the transfer to and to not use that card until the balance is paid off.

Answer 2

No, it doesn't hurt your score other than the minor ding for the new account credit inquiry.

However, you should make every attempt to pay off the balance before the 0% interest rate expires.  And you should not run up balances on the other credit cards.

A lot of folks get themselves pretty deep in debt by shift to special offer interest rate cards and never really paying off the balance while running up other cards.

Answer 3

Transferring your balance does not affect your credit.  Credit inquiries do, however.

Answer 4

It may or may not hurt your score.  More depends on your current credit profile.  The ugly truth about 0% cards is that a lot of them only give you the zero percent on the transferred balance while new charges carry a higher interest rate.