Q: I’m wondering how credit card debt affects your credit history. My spouse and I each have about $2,000 in credit card debt, and the interest rate is 14.9 percent. We are paying more than the minimum due each month, but we want to get them paid off quickly.
We get card applications that advertise introductory rates of 1.9 percent for 12 months all the time. Is a balance transfer bad to do? I don’t want to mess with our good credit score on a balance transfer.
Perhaps this isn’t the smartest way to look at it, but I would take the higher interest for now to protect my credit later.
A: I believe transferring a balance to save money is a good way to go. It can hurt your credit history a little, but paying down your balance faster and saving money offers the bigger rewards.
Transferring a balance hurts your credit history a little in that you aren’t holding onto the same credit card for a long period of time. The transfer itself shouldn’t lower your credit. Also, if you have too many companies pulling copies of your credit history within a short period of time, your credit score can go down.
But you’ll be far better off if you transfer the balance and get the entire card paid off within the low-rate period.
October 28, 2004
Leave A Comment