4 Reasons Not to Get a Balance Transfer

1. You Have Bad Credit

If you have bad credit, there's a good chance that you won't qualify for a balance transfer credit card. Most balance transfer credit cards require good or excellent credit scores. And if you do qualify, the balance transfer offer may only offer an intro 0% APR for a few months or give you a low APR instead.

Instead of applying for a balance transfer credit card with bad credit, take some actions to improve your credit score first. Continuing to make on-time payments and paying down your balance as much as possible can help you improve your score. Once you've made some headway, check your credit score and consider applying for a balance transfer.

2. You'll Spend More With a New Card

Opening a new credit card and getting access to an additional line of credit could tempt you to charge more purchases. If you're prone to see a new card as more credit for you to take advantage of, you might rethink your decision to get a balance transfer card.

The new credit card may not be the only temptation to overspend. Once you complete a balance transfer, seeing a zero balance on your existing card may tempt you to spend. If you're not cautious, you could run up the balance again and create more debt to pay off in the long run.

3. You Struggle With Using a Credit Card

While it's true that people can find themselves in financial hardship for one reason or another, you might want to rethink the balance transfer and your credit card use in general if credit card debt is a recurring problem for you. Frequently having high credit card balances and needing balance transfers could point to the need to reassess your budget and financial priorities. As mentioned above, these financial problems might cause you to get deeper in debt once your balance transfer is complete.

4. The Balance Transfer Terms Aren't Ideal

Your balance transfer offer might not be ideal for your specific situation for a few reasons. For one, your balance transfer introductory term could be a short period of time and may not be worth it for you. For instance, you may get a 0% APR offer that only lasts six or 12 months. Once you factor in the balance transfer fee and the regular APR once the introductory offer expires, it may not help you save much money in the long term.

If the APR is more than 0%, you'll have to crunch numbers to see if the balance transfer still makes sense considering the higher introductory APR, regular APR and balance transfer fee.

Finally, if your balance transfer limit isn't high enough, then a balance transfer card won't be very helpful when you're trying to pay down larger, high-interest balances. Of course, you can always transfer a portion of your high-interest debt to your new 0% interest card. As long as you are organized enough to make payments on all of your credit cards, this could work, but isn't ideal.

Alternatives to Balance Transfers

If you've determined that the balance transfer route isn't for you, here are some alternatives that can get you back on track financially. Using one of these approaches may help you pay off credit card debt and maybe even improve your financial habits in the process.

• Cut expenses: Look for ways to cut costs from your personal expenses. Use the money you save to pay down debt.
• Earn extra income: Finding ways to make more money can also bring a surplus to your budget. You can sell things or take on extra work. Use your extra funds to pay down high-interest credit card debt.
• Get a personal loan: If you've got a lot of credit card debt, a personal loan may offer a higher line of credit with a reasonable interest rate and is often specifically for debt consolidation purposes.
• Consider credit counseling: If you need help reorienting your financial habits, credit counseling may offer a wide range of services that can help. Connect with a certified credit counseling agency for more information on how it could help you pay down credit card debt.