Should you transfer a credit card balance multiple times?

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Is it a bad idea to keep transferring your credit card balance?

Balance transfers make it easier to pay off high-interest credit card debt. A good balance transfer card can reduce the rate you pay on what you owe – sometimes as much as 0%. But while balance transfers are a great tool for saving on debt repayment, they can also get you in trouble if you handle them the wrong way.

A common question when transferring a balance is whether it’s a good idea to transfer the debt you owe multiple times. There are pros and cons to multiple balance transfers, and you need to consider both to decide if it’s a good idea.

When does it make sense to transfer a balance multiple times?

Transferring a balance multiple times can make a lot of sense if you’re doing it as part of a solid plan to pay off debt that you can’t afford to pay off in one balance transfer cycle.

Balance transfers offer promotional APRs for limited times. Sometimes it’s as long as 15 months. If you have $10,000 in credit card debt and can only pay $400 a month, you won’t be able to pay off the full $10,000 in 15 months. You will miss $4,000.

In this situation, it may still be a good idea to transfer your $10,000 balance to a card with a promotional 0% introductory APR for 15 months. If you do, you won’t pay interest on the full balance for more than a year.

Then, when your promotional rate expires, you can transfer the outstanding amount to a new balance transfer card to keep the remaining debt at 0%. If you can get a new balance transfer card with a promotional 0% APR for at least 10 months, you can successfully pay off the remaining $4,000 without incurring additional interest.

When is transferring a balance multiple times a bad idea?

Transferring a balance multiple times makes sense if you are aggressively paying off what you owe and won’t have time to get out of debt before the first 0% introductory APR expires. But it does not makes sense if you’re transferring debt just for the fun of it.

Transferring a balance can make it look like you’re making progress on your debt when you’re not.

If you transfer a balance and only make minimum payments, you probably won’t reduce your outstanding debt before the 0% promotional rate expires. Sure, you can transfer the debt again — assuming you’re able to qualify for another balance transfer card — but you don’t do much to free yourself of debt.

Continuing to transfer debts from one balance transfer card to another could become expensive if you pay a balance transfer fee each time. And if you’re making little progress on your debt and can’t transfer the balance, you’ll have to pay off what you owe at the card’s standard APR.

If a balance transfer is blocking your progress and you don’t get rid of your debt because you don’t feel the need to pay it off at 0%, it could hurt you in the long run as you dwell on your card debt. credit for years. .

Opening new balance transfer cards and transferring money can also hurt your credit score, especially if you’re transferring a balance near the credit card limit. This could make other loans, such as mortgages, more expensive.

Make sure your balance transfer is a smart money transfer

As you can see, there are times when multiple balance transfers make sense. If you have a plan to pay off your debt but can’t do it within the time frame of your first transfer, a second transfer can save you a fortune on interest. But you don’t want to keep moving debt from card to card without making progress.

As long as you are responsible for your repayment goals and find the right balance transfer offers, there is nothing wrong with using this technique multiple times to keep interest charges as low as possible while you permanently freeing you from your credit card debt.

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Gladys T. Hensley