
Get exclusive money-saving offers and guides
Straight to your inbox
We’re reader-supported and may be paid when you visit links to partner sites. We don’t compare all products in the market, but we’re working on it!
When used correctly, balance transfer credit cards can help you repay your debt and improve your credit score as a result. If you struggle to repay your debt or have other issues with your balance transfer, it could have a negative impact on your credit score. In this guide, we've unpacked how a balance transfer can affect your credit history and what you can do to avoid a drop in your credit score.
Check your free credit score and credit report first
Applying for a balance transfer credit card, closing old accounts after consolidating your debts and making repayments can all impact your credit score. This information is listed on your credit report and lenders can request a copy when you apply for a new line of credit.
How a balance transfer will affect your credit score will depend on your situation, but you can compare some of the possible impacts below:
How to understand your Experian credit score
There are a few simple tips you should be mindful of to keep your credit file in good standing when conducting a balance transfer:
By consolidating your debt and reducing the number of credit cards you have listed on your credit report, your credit score can improve. As you pay off your debt you also have the option of reducing your credit limit, which can also have a positive impact on your credit score. Ultimately, paying off debt is going to put you in a better financial position.
If you don't pay off your debt, apply for several cards at once or keep using your old accounts to rack up more debt, a balance transfer could hurt your credit score. So before you apply for a balance transfer credit card, consider the different ways it could affect your credit score based on your circumstances to help you decide if it is the right option for you. If you're unhappy with yours, see Finder's guide to improving your credit score for tips.
Images: Getty
Back to topEnjoy 10,000 bonus points and 12 months interest-free on balance transfers and purchases. Plus, an ongoing $0 annual fee.
Credit cards are being used less and experts say Buy Now Pay Later services such as Afterpay and Zip are to blame, according to new research from Finder. In this month's Finder RBA Cash Rate Surveyâ„¢, 39 experts and economists weighed in on future cash rate moves and other issues related to the state of the Australian economy.
Earn flexible rewards points as you spend and enjoy a big 100,000 bonus points offer with the Citi Rewards Credit Card.
This card offers 0% interest on balance transfers for 36 months, a discounted $29 first year annual fee and platinum benefits including airport lounge passes and complimentary insurance covers.
Credit card misuse is rife in Australia, according to new research by Finder, Australia’s most visited comparison site.
Enjoy 100,000 bonus Velocity Points, a reduced first-year annual fee and points per $1 spent with the Citi Rewards credit card.
Get a firmer grasp of your finances with this free tool.
How to find out your credit score using this free tool.
Follow these tips to get a handle on your credit with this free tool.
How to get an accurate snapshot of your credit history with this free tool.
Does a balance of a credit card appear on your credit history if it hasn’t been due yet such as the 60 days has not been reached yet?
Hi Ken, thanks for your inquiry!
An overdue balance will only appear on a credit file after the statement is due.
Cheers,
Jonathan