Transferring Credit Card Debt
REM # F583
By Ilyce R. Glink
Summary: Ilyce advices a reader on when to transfer credit card debt and how to build a good credit score.
Q: I received an offer from a credit card company to transfer my $6,000 balance to a card. I’ll pay a one-time fee of $65 to transfer the balance, but then the interest rate will be 0 percent for a year. After that, the interest rate will rise to 9.9 percent.
That’s what I’m paying now. So, it seems like the new card is a good deal. But, I’m worrying about my credit score, because I want to apply for a car loan and possibly a home loan in the next six months.
Should I transfer the balance and then close my original account? Or, should I keep it open?
A: It sounds like you’ve got a great opportunity to transfer your balance, and not pay interest for a year. As long as you’ve read the fine print, and there are no hidden fees (in addition to the $65 you know you’re going to have to pay) attached to this move, I’d make it.
But you should keep your current credit card account open, even though it will no longer have a balance and you won’t be charging anything on the card.
One of the things that helps raise your credit score is having credit cards accounts open for a long period of time. So, if you have a card for 10 years, it's better than having a card for one year and closing the account.
So, transfer the balance, and keep the account open, for now. Make sure you put as much toward paying down the balance as possible, so when you do go to apply for a car loan or home loan, you’ll be able to borrow what you need to buy what you want.
NOTE: This column is distributed by Real Estate Matters Syndicate, PO Box 366, Glencoe, Illinois, 60022. This column may not be resold, reprinted, resyndicated or redistributed without written permission from the publisher.
Revocable Living Trust And A Life Estate Deed
100 Percent Investment Property Loans
Creditors "Charged Off" Credit Account
Protecting Yourself When Co-Signing A Loan
New Homeowner Waits For Market To Cool
Link to This Article
Like what you've read? Spread the word! You can link to this article
from your website by copying the following code and adding it to
a page on your website:
Copyright ©2001-2007. ThinkGlink, Inc.
All rights reserved. Reproduction of material from any www.ThinkGlink.com pages without permission is strictly prohibited.
Site designed by Walker Sands Communications
