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Sunday, May 26, 2024   

Credit card balance transfers
by Scott Bilker
Scott Bilker is the author of the best-selling books, Talk Your Way Out of Credit Card Debt, Credit Card and Debt Management, and How to be more Credit Card and Debt Smart. He's also the founder of DebtSmart.com. More about and DebtSmart can be found in the online media kit.
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Scott Bilker


A friend told me that they heard that continually doing balance transfers from one credit card to another can negatively affect my credit rating and that they also heard that there is a limit to how many balance transfers I can do. However, they did not know what that limit is. I've read in at least one of your books that you are constantly doing balance transfers to whatever is the best offer available at the time.

Is there a limit on how many balance transfers I can do in a year, or even my lifetime? Do specific credit card companies have their own limits? Will the balance transfers hurt my credit rating if I am paying down my credit cards and even paying off others during this process?


Great question!

I would have the worst credit rating on earth and also have far exceeded my limit of balance transfers if what you heard was true! Actually, one could argue that the exact opposite is the case which is, the more balance transfers you do, the more active you look on your credit report, and the more banks will attempt to get you to transfer your balances to them!

Actually, the more I transfer my balances, the more direct mail I receive from banks asking me to transfer my balances. And when I do transfer my balance from card "A" to card "B," within two weeks, I receive a new transfer offer from "A" asking me to come back!

As far as limits are concerned, you'll only be limited by the market, i.e., by the credit offers that are available to you personally. If banks want your business, they'll need to come up with a good offer. That's how you have to think of it. It's possible that certain companies may have a policy about transfer limits, but I've never heard of such a limit. Based on my daily snail-mail, I doubt there is any limit.

The only possible time that you could have any trouble with doing balance transfers and your credit report is when you're opening new lines of credit to do those transfers and simultaneously applying for another loan, like a mortgage. The mortgage bank may not like seeing all your open lines of credit because, from their perspective, you are risky since you could possibly get into trouble if you spend that available credit. But here too can be many exceptions. 

For example, when I purchased my house I had $24,000 in credit card debt on about 24 credit cards, and the bank approved the mortgage without a single question because I have never been late paying on any account.

The biggest mistake you can ever make is being late. Once you start to pay late, that's when you'll have problems with transfer options and interest rates and everything to do with your financial life.



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