What's the deal with Capital One balance transfers and existing customers?

Unfortunately, you cannot transfer a balance from one Capital One card to another. Most issuers don’t allow that, since banks would rather gain a new customer with an existing debt over an existing customer who’s transferring the debt from an old card to a new one.

But you can move your Capital One debt to another card, from a different issuer. Here is a list of … read full answerthe best balance transfer credit cards.

Balance transfers don’t hurt your credit score directly, but transferring a balance can indirectly cause credit score damage. When you apply for a balance transfer credit card, for example, 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. A balance transfer could still result in high credit utilization, though, and allow you to rack up more debt than you can afford to repay. Both of those things can hurt your credit score.… read full answer

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.

You can use WalletHub’s free credit score simulator tool to get a sense of how a balance transfer might affect your credit score.

How Balance Transfers Can Help or Hurt Your Credit Score

• Credit Inquiries Hurt: 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.
• Lower Account Age Hurts: Adding a new balance transfer card will reduce the overall age of your accounts, which can have a slight negative impact on your score.
• Increased Utilization Hurts: 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.
• Missed Payments Hurt: If you don’t continue to make payments to your original creditor while the balance transfer is being processed, your credit score will suffer. 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.
• Reduced Utilization Helps: 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.
• Low Interest Helps: 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.
• Less Debt Helps: A balance transfer can help you reduce your debt load. That’s important because how much debt you owe is a key ingredient in your credit score. The less, the better, since people with little-to-no debt are in a more stable position financially.

Bottom Line

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.

Technically, you cannot pay a Capital One credit card with another credit card. In other words, you cannot enter a credit card account number to pay your bill the same way you would with your bank account number. There are a couple of ways, however, where you can indirectly use a credit card to pay your Capital One credit card bill: Cash Advances and Balance Transfers.… read full answer

A cash advance is when you use your credit card to withdraw money at an ATM, just like with a debit card. You can then use those funds to pay your Capital One credit card. You can also request a convenience check, which looks like a regular check that you can deposit to your bank account. Once the check clears, the amount of the check is charged to your credit card.

Neither approach is a good idea. For starters, cash advances are an expensive transaction. You’ll be charged at fee of 3% to 5% of the transaction amount, along with any ATM user fees. A convenience check would spare you the ATM fee, but it is still considered a cash advance, and all other fees and interest rates would apply.

A cash advance is also subject to a portion of your credit limit, usually 20%. That’s 20% of your total credit limit, so if you have other charges on your card, that will reduce your cash advance limit even further.

Where the real expense kicks in is with the high interest rates. Expect to pay a higher rate than what you’re currently paying. The interest starts to accrue as soon as the transaction occurs, and is not waived by a grace period or a 0%. If you don’t pay off the entire cash advance balance, a new wave of interest – at the Cash Advance rate – will pile on top of current balance, along with any previously accrued interest.

A transfer balance is the more sound option, as long as you pay attention to the terms. Ideally, would want to transfer your Capital One credit card balance to a balance transfer card with an you introductory 0% interest rate. You’ll pay no interest on the amount transferred for a specified number of months, but you’ll likely pay a transfer fee of 3% to 5% of the total transaction. You cannot, however, transfer a balance from one Capital One credit card to another.

The amount you can transfer is capped by your total credit limit, so how much available credit your have will determine how much you’ll be able to transfer. Be sure to factor the transfer fee into your balance transfer amount. Also, using up too much of your credit limit will raise your debt-to-credit ratio and will negatively affect your credit score.

If you’re transferring a balance to a card with a 0% interest rate, make sure you’re aware of when the 0% rate expires and what the new interest rate will be. If you don’t pay off the entire balance transfer by the end of the introductory period, any unpaid balance will be charged at the regular interest rate.