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.

Published: Feb 20, 2004