This post originally appeared January 7, 2016 on CreditCards.com as “Check credit score before applying for balance transfer“

By Barry Paperno

Dear Speaking of Credit,
I just lowered my car interest rate and have 24 months left. At the same time, I’m using my credit to finance a used car for my son. I want to transfer my credit card balances to a lower percentage rate, but I’m afraid it will look bad to apply for a balance transfer at the same time as I am financing another automobile. How long should I wait?  — Lyndi

Dear Lyndi,
It’s good that you’re being cautious about applying for credit, as there are some credit-scoring downsides that can occur once a credit application is submitted, whether successfully or unsuccessfully, that every credit applicant should know.

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This post originally appeared August 6, 2015 on CreditCards.com as “How banks limit the size of your balance transfer.“

By Barry Paperno

Dear Speaking of Credit,
Is there any way of knowing how much of a balance transfer a card that you are applying for would approve? I need to transfer $10,000 and after applying for the Chase Slate Card, was told that I only qualified to transfer up to $2,600. I didn’t feel that was worth opening another card.

We currently owe $10,000 to American Express and the same to MasterCard. We are looking to transfer $10,000 of it. I don’t want to have more than three credit cards open. I would like to keep the card open (with a zero balance) that I transfer the funds from, our American Express and the new one with the 0-percent interest rate. I’m thinking that more than three open cards will not look good when running a credit report.

Bottom line, we owe $20,000 total and we don’t know the best way to pay it off. Your advice would be great! Thanks so much! — Mary

Dear Mary,
I can see you are a prudent credit card shopper who doesn’t enter into new credit card relationships frivolously. At $20,000 total debt, however, I don’t have to tell you that you’re paying exorbitantly high interest each month and that your credit scores are no doubt suffering from carrying such a large amount of debt.

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This post originally appeared July 30, 2015 on CreditCards.com as “How credit reports handle balance transfers.”

By Barry Paperno

Dear Speaking of Credit,
I have a few credit cards I want to do a balance transfer on. My question is, if I do a balance transfer, do the cards I transferred show up on my credit report or just the one I transferred the others to? Does that make sense? — Leah

Dear Leah,
Yes, your question makes a lot of sense. The answer is that with a balance transfer, the cards from which you transferred a balance will continue to appear on your credit report, as will the new or existing card to which the balances are transferred. It typically takes many years for a credit account of any kind — whether a card or loan — to come off your credit report once it’s no longer in use.

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This post originally appeared April 30, 2015 on CreditCards.com as “Debt shifting helps your score, but paying it off is better“

By Barry Paperno

Dear Speaking of Credit,
I’m looking to refinance my house, but for some reason my credit is not so good. Now, I kind of know how credit-to-debt ratio works. I have a total of approximately $14,000 in debt, from $39,000 available credit. That puts me at about 30 percent. I have about 10 credit cards revolving. Some are revolving anywhere from 20 percent to 70 percent of credit available. Do you think I can increase my credit score by just shifting my debt from card to card so I can have all my individual cards near 30 percent? Because I know that the credit bureaus look at overall debt ratio, then at individual debt ratios with credit cards. — Mike

Dear Mike,
Yes, I believe shifting balances among your cards to reduce some of the highly utilized balances to around 30 percent could help your score. But by how much, and whether it will be enough to qualify for that refi, I’m not so sure.

Raising a not-so-good score to a good one is likely to require more in the way of debt reduction than debt shifting, and that will require the added ingredients of money and time. And, if you have any recent late payments, even more time.

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