How to Use Balance Transfers Without Hurting Your Credit Score

A balance transfer credit card can be a powerful tool to crush high-interest debt but if you’re not careful, it can also unintentionally ding your credit score. In 2025, with credit scoring models more sensitive than ever to borrowing behavior, understanding how balance transfers affect your credit is key to using them wisely.

Fortunately, when done right, a balance transfer can not only save you hundreds (or even thousands) in interest it can actually help boost your credit profile. This guide breaks down the key credit factors affected by balance transfers and how to navigate them without hurting your score.

How Balance Transfers Impact Your Credit Score

Credit scores are influenced by a mix of factors. Here’s how a balance transfer touches the major ones:

1. Credit Utilization (30% of your score)

What happens:
When you move a balance from one card to another with a higher credit limit, your overall utilization may go down, which helps your score. But if your new card is maxed out or nearly full after the transfer, your individual card utilization could hurt you.

Example:
Transferring $4,000 to a card with a $4,500 limit puts that card at nearly 90% utilization a red flag to lenders.

How to avoid the dip:

Try to keep the new card’s balance below 30% of its limit
Don’t add new purchases to the transferred balance card
Leave your old card open and unused to preserve your available credit

2. New Credit Inquiries (10% of your score)

What happens:
Applying for a new balance transfer card triggers a hard inquiry, which can temporarily lower your score by a few points. This impact is usually minor and fades after a few months.

How to minimize it:

Only apply when you’re confident you’ll qualify
Use prequalification tools (which use soft pulls) before applying
Avoid applying for multiple cards within a short time frame

3. Length of Credit History (15% of your score)

What happens:
Opening a new account lowers your average age of credit, especially if your existing credit history is fairly young. This can slightly reduce your score in the short term.

How to protect it:

Don’t close your older credit cards
View a balance transfer card as a long-term account, not just a short fix
Consider making small purchases on old cards occasionally to keep them active

4. Payment History (35% of your score)

What happens:
Payment history is the biggest factor in your credit score. Once you transfer a balance, staying current with payments is absolutely essential.

How to protect it:

Set up automatic payments or reminders
Pay at least the minimum on time, every time
Avoid carrying balances on both the old and new card it increases your risk of missed payments

5 Tips to Protect (and Even Improve) Your Score During a Balance Transfer

Using balance transfers strategically can work in your favor. Here’s how:

1. Transfer Less Than 50% of the New Card’s Limit

Even if your goal is to consolidate, try not to max out the new card. Transferring less while leaving some breathing room—shows you’re not desperate for credit.

2. Don’t Close Old Credit Cards

Even if you’re done using the card with the original balance, keeping it open maintains your credit age and available credit—both of which help your score.

3. Avoid Making New Purchases on the Transfer Card

Most balance transfer cards only offer 0% APR on transfers, not new purchases. And charging new items increases your debt and utilization ratio, undercutting the benefit.

4. Pay Off the Balance During the Intro Period

If the 0% APR lasts 18 months, create a repayment plan that clears the balance before that date. Once the promo ends, interest rates can soar negating your savings.

5. Monitor Your Score and Utilization Monthly

Use free tools like:

Credit Karma
Experian CreditWorks
Your bank’s credit score tracker (like Chase Credit Journey)

These platforms help you catch drops early and understand how your actions affect your score.

When a Balance Transfer May Not Be Right for You

While balance transfers offer big savings, they’re not ideal in every situation.

Avoid if:

You can’t pay off the balance before the 0% APR expires
You’re likely to rack up new debt while paying down the old
Your credit score is too low to qualify for a good offer

In these cases, it may be better to explore personal loans, debt management plans, or negotiating directly with creditors.

A Smart Move—If You Play It Right

Balance transfers are a useful debt tool but like any financial move, they come with trade-offs. If you manage your utilization, keep your old accounts open, and make on-time payments, the credit score impact is often positive, not negative.

The key is not just transferring the balance, but changing the habits that caused the debt in the first place. Done responsibly, a balance transfer can be the turning point toward long-term financial health.

Thinking about a more comprehensive plan to get out of debt? Read next: Should You Consolidate Debt? Pros, Cons, and Alternatives to weigh your full range of options.