No, balance transfers are not inherently bad, but they can be bad for your finances if used recklessly. When you transfer a balance, you're ideally shifting high-interest debt to a credit card with a lower interest rate. The best balance transfer credit cards feature 0% APR offers for a specific number of months, but these introductory APRs eventually expire. If there's a balance remaining at the end of the introductory period, it will accrue interest daily at the card's regular APR. And if you're late in paying, the issuer could revoke the introductory APR. Your remaining balance would then be subject to the regular APR or even a higher penalty APR in some cases.
Opening a balance transfer credit card account may affect your credit score because it can trigger a hard inquiry on your credit report. But that's the case with most credit cards. The most important thing is to use a balance transfer to reduce the cost of your debt, not just prolong spending habits that really can't last in the long run. So avoid repeated balance transfers. While you may get a break on interest for a while, this practice may limit your chances of getting approved for another balance transfer card in the future.
You also need to consider balance transfer fees. The average balance transfer fee is about 3% of every balance you transfer. That could end up being very costly. While there are cards that have no balance transfer fees, you often get a longer 0% introductory term in exchange for a fee, and that may save you money in the long run. Also, you can only transfer balances up to your card's credit limit (or sometimes a lower balance transfer limit), and that includes fees.
When used responsibly, balance transfers are a useful tool that help you reduce the cost of your debt. Just make sure their cost, including APRs and fees, is lower than your existing debt. It's a good idea to use a balance transfer calculator to figure out which card will save you the most money at the end of the day.
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