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Compare balance transfer cards for bad credit
Explore options to build your credit and pay off debt.
If you’re stuck paying high interest rates on your debt, a balance transfer credit card for bad credit could be one solution. This type of card allows you to move your existing debt onto a new card with low introductory interest rates.
For example, instead of paying 28% interest on your current debt, you may get around 10% interest for six months on your new card. After the intro period ends, though, your interest rates get back up on any unpaid balance. Despite that, you still get to save money on interest even for a short period of time.
What's in this guide?
- Will I be approved for a balance transfer card with bad credit?
- Are there 0% intro balance transfer credit cards for bad credit?
- Can a balance transfer help rebuild credit?
- Should I wait to improve my credit before applying for a balance transfer card?
- Five things you can do if you're unable to get a balance transfer
- How to compare balance transfer offers
- Choosing a credit card when your credit score is damaged
- Compare secured credit cards
- How another card can affect your credit score
Will I be approved for a balance transfer card with bad credit?
It’s difficult to be approved for a balance transfer card with poor credit because lenders typically require a credit score of 580 or higher. To build your credit, look into a secured credit card. With good spending habits and on-time payments, you could improve your credit enough to graduate to a balance transfer card.
Are there 0% intro balance transfer credit cards for bad credit?
Typically, no. Balance transfer offers for a 0% intro APR are usually made to attract customers with higher credit scores and balances who are considered lower risk and able to steadily pay off their balances.
If you have a credit score between 300 and 579, it could be difficult to find a balance transfer card in general. You’ll do better with a credit score of 580 or higher.
You could find a solution with a balance transfer card — but it likely won’t be at a 0% intro rate. High balances and APRs mean paying the minimum monthly repayments won’t help, but a lower interest rate could help cut some time off paying off your debt.
Can a balance transfer help rebuild credit?
Most balance transfer cards have an introductory APR for 6 to 21 months. During this time, your debt won’t accrue new interest, making it easier to get ahead and pay down your balances.
Balance transfer cards report to credit bureaus, so you can strengthen your credit score as you pay off your debt. Each on-time payment will start building a positive history.
Should I wait to improve my credit before applying for a balance transfer card?
With bad credit, it’s unlikely that you’ll get a 0% intro APR period on balance transfers with a credit card. If your goal is to get no interest on your debt for a promotional period, then yes — you should consider waiting until you improve your credit score and then apply for a balance transfer credit card.
Five things you can do if you’re unable to get a balance transfer
If your balance transfer application was declined, or if you don’t think you’re eligible to apply yet, here are four alternatives to consider to help pay down your debt and improve your credit score.
- Get your debts in order.
Instead of applying for a credit card or balance transfer when you have bad credit, focus on repaying your debts and repairing your credit score first. Determine what you owe on your credit cards or other accounts and list how much interest you’re charged for each debt. Prioritize paying off your high interest debts first. Once you have an idea of how much you owe and how much you need to repay, you can start looking at your debt consolidation options.
- Talk to your current card provider.
Your card provider may be able to offer you a payment plan or some other options to help you pay down the debt. Over time, this could also help you improve your credit score and increase your chances of getting approved for other credit cards.
- Get a secured credit card. Secured cards with promotional interest rates on balance transfers can help you move your balance and pay lower interest rates. Because your deposit functions as a predetermined credit limit, a secured card can also help you set a spending limit and learn to manage credit. With responsible card use, you can build your credit score as most secured cards report to the three credit bureaus. Just be aware that the initial deposit can be expensive and fees and interest rates can be high.
- Consider a debt consolidation loan
If you’re unable to apply for a balance transfer credit card, another option is to get a personal loan to consolidate your debt. This can help you combine multiple debts into one account and make one repayment per month. Making these repayments on time can also help improve your credit score by showing that you are managing your debt responsibly.
- Look at short term loans.
This is another option if you have bad credit and need cash quickly. The requirements for these loans are different from those of credit cards and the funds are often available in a few days. However, payday loans usually have very high fees and short repayment terms. Before applying for the loan, calculate if you can afford it by considering the fees and how long you’ll need to repay the balance. If you can’t repay the loan in time, you could end up in even more debt and hurt your credit score even more.
How to compare balance transfer offers
Balance transfer cards temporarily lower your APR so you can make a dent in your debt. Here’s what you can look for when comparing balance transfer offers:
- Credit score. Most offers require a credit score of 580 or higher, so carefully read the eligibility before you apply.
- APR. Look for an offer that has a lower APR than the credit card or loan you’re paying.
- Transfer fees. Many cards come with transfer fees between 3% and 5% of the amount you transfer.
- Length of offer. Low APR offers are only for a certain amount of time, then the APR is reverted to a higher rate. Compare if that reverted rate is lower than what you pay already to make the transfer worth it.
Choosing a credit card when your credit score is damaged
If you have a credit score of less than 600 you may only qualify for certain cards. If you can’t get approved for a balance transfer credit card, you can always sign up for a secured credit card and build a positive credit history.
Compare secured cards with no credit check to avoid a hard pull and a slight drop in your credit. Also consider the fees, interest rates and eligibility for these cards. Note that secured credit cards do not come with perks like other regular credit cards. They are meant for credit-building so you can eventually get a better card.
Compare secured credit cards
You’re unlikely to qualify for a balance transfer card with poor credit. Your best bet for obtaining a balance transfer card is to work on building your credit first. Use the table below to compare secured card options that can help you on your credit building journey.
How another card can affect your credit score
You can build credit with just one credit card if you make consistent purchases and on-time payments. However, opening another credit card could improve your credit utilization ratio, which affects your credit.
Your credit utilization ratio is how much of your available credit you’re using. So if you have a balance of $500 and a credit limit of $1,000, your credit utilization ratio is 50% — or $500 divided by $1,000. Lenders like to see a low credit utilization rate, and experts recommend keeping it at 30% or less.
A balance transfer can help with that. Here’s an example:
- You have a $1000 balance on your current card. This card has a $2,000 credit limit. Your credit utilization rate is 50%.
- But when you transfer that $1000 balance to another card with a $3,000 credit limit, your credit utilization rate is 25%.
With that 25% credit utilization rate, you’ll get a slight increase to your credit score.
What to watch out for
About 15% of your credit score is determined by the age of your credit. That means that a credit card you’ve had since college actually looks good on your credit. Opening a new card can lower the average age of your credit.
The lure of a new credit card can bring the urge to overspend. If you open a balance transfer card in the hopes to get out of debt, make sure you don’t make any new purchases and pay your bill on time.
What credit unions and banks get out of balance transfer cards
Balance transfer credit card offers are tools to attract new customers. The introductory offers can be attractive and helpful to manage debt.
But once the introductory period ends, interest rates revert to a much higher rate. Prioritize paying off your balance within the introductory period so you aren’t caught off guard when the intro rate ends.
If you’re looking for a better way to manage your debt, you have options. When your credit is low, focus on building your credit score so you can get a credit card or loan with low APRs. Once you can qualify for a balance transfer card you’ll save money while paying down your debt.
Frequently asked questions
- What is a balance transfer credit card?
A balance transfer credit card lets you move the money you owe on one credit card to another, usually at a lower interest rate.
- Are there any fees I should be aware of?
While each card is different, there’s generally some kind of fee for balance transfers around 3% to 5% of the transaction amount. Additionally, keep your eyes out for an annual fee and the revert APR after the promotional period.
- Can I transfer more than just credit card debt?
Most balance transfer cards let you transfer multiple kinds of debt to your new card, like auto loans, mortgages and student loans.
- How long does it usually take for balance transfers to post?
Typically balance transfers post within a week of being initiated by the provider. This can take up to six weeks though, so continue paying your previous balance until you confirm it’s been completed.
- Are there any common mistakes I should watch out for?
Make sure you are making your payments on time, not ignoring the revert APR rate and not using your card for purchases that could lead to additional debt.
Additionally, watch out for APR penalties on top of late payment fees.
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