What reflects better on your credit score? What’s financially smarter?

Deal Score0

I know that best plan is to have no credit card debt at all, but let’s say you do. Would it be better to apply for a card with 0% interest and transfer the balance…then after a year (or however long) when the 0% offer expires apply for a new card with 0% and transfer the balance…etc. Or just suck it up and pay the 16% interest rate (or whatever it jumps up to) after the 0% is over? I heard it’s best for your credit to keep the same credit card, but it just seems smarter to go with a lesser interest rate.

Thanks in advance!

  1. Reply
    July 21, 2011 at 12:59 am

    If you pay off the card every month…. there is no interest.

    That is the smartest way to deal with a credit card. Keep it for the line of credit it adds to your overall credit and pay it off every month when the bill comes.

    If you can’t handle that then at least keep the balance at 10% or less of your total line of credit and pay off slowly but bring the account back to Zero balance at least twice a year.

    The longer you have a credit card the better for your credit score… and applying every year for yet another credit card will soon not work… because you can accumulate too many cards and future lenders will simply refuse to grant you a line of credit when you already have 10 going and don’t have the income that would be able to support such a huge line of credit.

  2. Reply
    July 21, 2011 at 1:08 am

    Well, something you should be aware of with these zero percent balance transfer offers is they often times require an upfront fee, usually stated as a percentage of the transfer amount. Also, applying for new credit cards will ding your credit score slightly, if for nothing else, the recent inquiries when the creditors do a hard pull.

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