You cannot cancel or reverse a balance transfer once the transaction is complete. The timeline for requesting a cancellation varies by issuer. For example, Discover and Citibank allow you to cancel a balance transfer within 14 days of opening an account. For Chase balance transfers, you’ll have around 10 days after they mail your new card to cancel the transaction.
If you’re transferring a balance to a card you already own, the clock starts even sooner, as the issuer doesn’t have to approve an application for an account. Some issuers will allow you to cancel a balance transfer after you request it but before it posts. In any case, it’s best to request cancellation as soon as possible after deciding that’s what you want to do.
Balance transfers don’t hurt your credit, but transferring a balance can indirectly cause credit score damage. When you apply for a balance transfer credit card, it will generate a hard inquiry on your credit report, causing a slight dip in your credit score. If you transfer a balance to an existing credit card account, however, there is no hard inquiry and no credit score damage. … read full answer
Balance transfers don’t hurt your credit score directly. But when you apply for a balance transfer credit card, it will generate a hard inquiry on your credit report, causing a slight dip in your credit score. If you transfer a balance to an existing credit card account, however, there is no hard inquiry and no credit score damage as a result. A balance transfer could still result in high credit utilization, though, and even allow you to rack up more debt than you can afford, if you’re not careful. Both of those things can hurt your credit score.
So, the act of transferring a balance itself won’t affect your credit, but it will indirectly alter several key components of your credit profile, from utilization to the age of your accounts. These changes might lower your score a bit in the short term. But over time, interest savings and the ability to pay off your debt faster should make transferring a balance a net positive for your credit score.
Here is how a balance transfer could hurt or help your credit:
Balance transfers can take up to three weeks, or be completed in just a few days, after you make a request or apply for a card. Transfers to new accounts may take longer than existing accounts. Continue making payments on your original account in the meantime to avoid hurting your credit score.
If you apply for a new balance transfer card, the resulting hard inquiry will likely cause a slight dip in your credit score for up to 12 months.
Adding a new balance transfer card will reduce the overall age of your accounts, which can have a slight negative impact on your score.
Keep an eye on how the transfer affects your account’s credit utilization. Making a transfer will usually add 3%-5% to your debt due to balance transfer fees. If your utilization is over 30% of your credit limit, that’s not good for your score.
If you leave your old credit card(s) open, adding a new card will reduce your utilization ratio across all accounts, assuming no additional spending. The utilization on the card you transferred the balance from will drop, and it will increase on the card you transferred the debt to.
Balance transfer cards often have 0% introductory APRs. This gives you the chance to pay off your balance faster, since the full amount of your payments will go to the principal rather than interest. This is good for your score long-term.
Balance transfers won’t hurt your credit by themselves. But they affect other elements of your credit that could bring your score down a little temporarily. Still, the benefits will outweigh the negatives in the long run, as long as you plan to repay most, if not all, of your balance during your card’s low introductory APR period.
Where people get into trouble is trying to use a balance transfer to support unsustainable spending habits, thinking 0% balance transfer credit card offers are always available. They’re not, and learning that the hard way is a very expensive mistake. So make sure to use a balance transfer calculator to make a payment plan.
Balance transfer cards can help qualified borrowers reduce the cost of existing debt and pay off what they owe faster than they would otherwise. Here’s how it works: A borrower uses a balance transfer credit card to pay off some or all of a credit card or loan balance owed to another bank or credit union. This effectively transfers the borrower’s payment obligation, meaning he or she now owes the balance to the issuer of the balance transfer credit card, which may offer lower finance charges.… read full answer
For a balance transfer card to work to perfection, it must offer low enough rates and fees for long enough that the borrower can repay the transferred balance before a high regular APR takes effect. Most credit cards allow balance transfers. But certain offers are classified as “balance transfer credit cards” because they have relatively low APRs and fees on transfers.
In most cases, you will have the option of requesting a balance transfer when you apply for a new credit card. You should be able to submit a request with an existing account, too, as long as you aren’t already carrying a big balance from month to month. But certain account terms, like 0% intro APRs and $0 transfer fees, may only be available for a limited time after account opening. And some credit cards don’t allow balance transfers at all. You can learn more about how the process works below.
Here’s how balance transfer cards work:
You request to move a balance to a new credit card.
The issuer considers your request and approves it if they think you are creditworthy.
The new issuer pays the original lender for the approved transfer amount.
Your balance moves to the new card, and any applicable balance transfer fee is added to the principal of the balance you’re transferring.
You must pay at least the minimum amount required by the due date for each billing period to keep your account in good standing. Interest may apply immediately, unless the card has a 0% introductory APR, in which case the regular APR will kick in after it expires.
When you’re comparing balance transfer offers, it’s worth calling your current credit card’s issuer to see what it can offer. Say that you plan on doing a balance transfer unless you get a lower interest rate. Your rate may not be reduced to 0%, but even a slight APR reduction will help you save while your application for a 0% transfer is being processed.
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