 TITLE: All You Need to Know About Balance Transfer Credit Cards CONTENT: How Does a Balance Transfer Affect Credit?\n------------------------------------------\nA balance transfer can impact credit in the following ways, which are important to consider when deciding whether to pursue it.\n*   **A balance transfer will result in a hard inquiry.** Whenever you apply for new credit, a hard inquiry appears on your credit report. That shows lenders how often you're seeking additional credit lines. Many hard inquiries in a short period of time could be a warning sign that you're not using credit responsibly. A hard inquiry stays on your credit report for about two years, but its effect diminishes over time—and is less consequential than whether you've paid bills by the due date or kept debt balances low.\n*   **A balance transfer can lower your credit utilization rate.** The amount of debt you use compared to your credit limit is called your credit utilization rate. A $1,000 balance on a card with a $5,000 limit translates to a 20% utilization rate, for instance. Keeping your utilization under about 30% will help you avoid negatively impacting your credit.  \n    When you apply for a new card and receive an additional credit limit, the total available credit across all of your cards increases. In other words, you still have debt, but it's a smaller portion of your total credit line. Plus, since the debts you transferred are no longer on your previous cards, your new utilization on those cards is 0%. This change in credit utilization can strengthen your credit score, as long as you don't continue adding to the debt and you pay it off over time. END