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If I transfer a balance to a 0% credit card and close out the original card, how will my credit be affected? |
If I transfer a balance to a 0% credit card and close out the original card, how will my credit be affected? Here are 5 factors that will help you select a balance transfer credit card that will prove more beneficial than others. 1. Earlier it used to be 0% Intro APR on balance transfers for a specified period, but now it is gone. It is very rare to find a balance transfer credit card with 0 % Intro APR. So, the next best thign is a low APR for balance transfer. There are many credit card which offer balance transfer at APRs ranging from 4.5% to 7% for a limited period and a regular APR after that. 2. It is good to have a low APR balance transfer but if a credit card offers a low APRon balance transfer for a very short period of time, it is better to look for another. Low balance transfer APR for the life of balances is a good option to have. 3. Credit card companies do charge some fees for transfering the balance. This could be anything between 3-5% of the amount transfered. This balance transfer fees increase the cost of balance transfer. So, the ideal situation would be to have a credit card which doesn't take any balance transfer fees. 4. Any balance that has been transferred has to be repaid, now what happens is that if you have done a balance transfer and miss one payment all the goodness of low balance transfer APR vanish and an instant high regular APR sets in. This can prove fatal for all the goodies you expected with the balance transfer. So, wouldn't it be nice to have a balance transfer credit card which offers a grace period on repayment. Read more from: http://www.credit-card-gallery.com/credi... It depends on your credit history. If you do this a lot, eventually it will damage your credit score. If you do it every once in a while, it might actually help your score by showing that you have paid off debts and closed them. It will depend on your credit limit on that card. Lenders look at your potential debt, so if it's closed it's better in that regard but they also look at your debt ratio. If it's closed your debt ratio is higher, which is not good. You might want to just cut up the card but leave the account open. If you are afraid you'll use the account then go ahead and close it. The best thing to do is transfer the balance and keep the old card open. The 'old' card has a longer history and adds available credit to your credit score. As long as you don't use that card it looks good. If you're afraid you might use the card because the account is still open, cut the card up, but don't cancel it. Read this guys blog, he's a mortgage consultant and cleans a lot of his clients credit reports. http://activerain.com/blogsview/37928/th... Good luck! Hello I agree with carspetz. When you transfer the old balance to the new card, leave the old card open because it has history. Do not close it! Suze Orman even said this. Here is a list of balance transfer credit cards http://www.ccvault.com/credit_cards/bala... |
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