credit cards

Are multiple balance transfers smart?

Leslie McFaddenQuestionDear Credit Card Adviser,
I made a balance transfer from my high-interest credit card to a zero percent card, but they would only transfer half of my balance. Should I try to transfer the remaining balance to another zero percent card, pay it off with the new card or neither?
-- Amber

AnswerDear Amber,
As you've discovered, balance transfers can be restricted to a portion of the credit limit of the new account. Credit card issuers reserve the right to reject the balance transfer request or approve a partial balance transfer.

You may not be able to transfer the rest of your balance to the new card at zero percent interest after you pay off the debt that you already transferred. That zero percent introductory rate may only be applicable to balance transfers made shortly after the account opening -- some offers only give you 30 days. After that, the interest rate for accepted balance transfers may be as high as the nonintroductory rate for purchases.

As for moving the remaining balance to yet another balance transfer card, make sure the interest savings outweigh the fee involved. The transfer fee on some offers can be as high as 5 percent of the transferred amount, with no cap on the fee. It could cost up to $75 to move $1,500 in debt, and up to $250 to transfer a $5,000 balance.

You also have to consider whether your debt will be paid off by the time the promotional rate on your balance transfer expires. Check the interest rate that applies after the introductory period ends. To see if you will save money by transferring your remaining balance to a new card, try Bankrate's balance transfer calculator.

Keep in mind that each new application for credit will create a hard inquiry on your credit report. Too many hard inquiries can lower your credit score, which in turn can make it harder to take out loans and do additional balance transfers.

Regardless of whether you transfer that remaining balance, it's important to strategize which debt to pay off first. When you're ready to crunch the numbers, try our debt pay down calculator.

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To ask a question of the Credit Card Adviser, go to the "Ask the Experts" page, and select "Credit Cards." Read more columns by the Credit Card Adviser. Follow Leslie McFadden on Twitter.
 

Bankrate's content, including the guidance of its advice-and-expert columns and this Web site, is intended only to assist you with financial decisions. The content is broad in scope and does not consider your personal financial situation. Bankrate recommends that you seek the advice of advisers who are fully aware of your individual circumstances before making any final decisions or implementing any financial strategy. Please remember that your use of this Web site is governed by Bankrate's Terms of Use.

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Product Rate Change Last week
Balance Transfer Cards 15.67%  0.04 15.71%
Cash Back Cards 16.32%  0.04 16.36%
Low Interest Cards 10.91% --0.00 10.91%
 
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