Credit Card Balance Transfers

Scott,
I would like to use a credit card introductory rate to pay off a bank loan. I will need to borrow $13,000.00 credit to pay off the loan. In order to do this, I will need to open two new credit cards, preferably with 0% interest for 6 months. I would then like to transfer the balances on those credit cards to new credit cards with low introductory rates. How often can I continue to transfer to new cards with introductory rates?

I have heard that if my credit report shows too many credit card company requests within one year that I will be turned down for new credit cards. I have also read that I can request credit card issuers not to run a credit report on me–so that my credit report will not show that I have applied for several credit cards in a short period of time, and thus I would be extended credit by new credit agencies. I thought all credit card companies would only issue credit if they first run a credit report on the applicant. Is this true, or do the companies automatically run a credit report on the applicant every time a balance transfer request is made?
–Gail

Gail,

Thanks for writing!

You’re being very DebtSmart® by transferring your balances to lower rates. Zero is always the best rate! Right now I have four cards offering me 0% for one year!

You can continue to transfer your balances to lower cards in perpetuity! My experience is certain proof of that result. I have been transferring my balances to low rate deals for over a decade. About 6 years ago I was told that these deals would end however, they’ve only gotten more frequent.

Last year credit card companies mailed 5 billion credit offers! That’s up from 3 billion in the year 2000. I doubt it’s going to be slowing down any time soon. And because of that fact the consumer is in control! We have the power to decide which banks we spend our interest charges on to buy their money.

It is true that when you apply for credit the bank looks at how many credit-inquires are shown on your credit report. The more inquires the more negatively it could, and I must stress, couldeffect your chances of getting new credit. Just because you have many inquires doesn’t mean you’re going to get turned down for new credit. Each bank has its own criteria for determining who to lend to and how much credit to allow.

By the way, your current creditors also take a look at your credit from time to time. This also shows up as an inquiry to your credit report. I have a dozen inquires on my report and it has never stopped me from getting new credit.

The most important factor is that you have paid on time. Don’t be late! That’s what will hurt your chances the most. Of course, judgments and repossessions don’t help either.

If you do get rejected for credit, always remember to request a copy of your credit report from the credit reporting agency that supplied that data to the creditor that rejected your application. And you get this report for free if you request it within 60 days of being rejected. Be sure to review that report for errors and dispute any inaccurate information.

You cannot request that a bank does not look at your credit file. Well, I guess you could make that request but they would say, “Okay we won’t look but you won’t be receiving any credit from us.”

I doubt it’s a standard for banks to review your credit report prior to completing a balance transfer on an existing account. However, they have probably warned you in their account terms that they can look at your credit report at anytime.

The bottom line here is that: 1) It’s smart to transfer your balances to lower rates 2) Credit inquires may or may not hurt you depending on each bank’s criteria. 3) If you are rejected for credit, always get a copy of your report and check it for errors. And take a look at all the credit inquires.

Good luck!

Regards,
Scott