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PrintQ&A: What kind of credit score do I need to get approved for a balance transfer credit card?
Credit, Debt Help September 10th, 2008Pam asks: Three years ago I racked up debts on several credit cards. I paid those cards off and closed them. Today, my only card has a 19% APR and no rewards. My credit score is only about 600 because I was (quite) late a few times. Today, I am debt free except for $3,000 on this card. I’ll pay it off in a year, but I hate paying 19% interest. Can I qualify for a balance transfer credit card?
Chances are your credit score is still too poor to qualify for the best balance transfer rates like a 0% APR for 12 months on the Discover Card or 2.99% APR offer from Blue from American Express.
You can try applying for these or other so-called prime cards (credit cards marketed to those with good or very good credit), but do not be surprised if your application is declined. Typically these cards want applicants with FICO scores of at least 700, or at least above 650. That’s not to say, however, that somebody with a lower score would never be approved, or somebody with a high score would be approved. Credit cards look at other factors besides your score, like your income and job history, and your current level of indebtedness.
For example, if you make good money and that $3,000 balance is your only debt, you may very well be approved for cards despite your weaker credit score.
If you do apply for these cards, note that every application for credit will lower your score, but only slightly. Making timely payments to your creditors and reducing your total debt are the most important things you can do to improve your score.
Another option is to look at Capital One credit cards for average credit. Capital One doesn’t currently offer any killer balance transfer rates, and some cards have annual fees between $19 and $39, but they offer a higher chance of acceptance for somebody with weak to average credit, and the regular APRs on these cards are pretty good.
The Capital One Platinum Visa for average credit, for example, offers people with average credit a low 8.9% regular APR on purchases and balances transferred. Even with the annual fee, swapping your $3,000 balance from 19% APR to 8.9% APR for a year could save you up to $300 in finance charges, and even more should you take longer than a year to pay it off.
Whatever you do, avoid applying for credit cards with high fees and/or high interest rates just to get a new credit card. While adding one or two new accounts and managing them responsibly will help your credit score, it shouldn’t cost you an arm and a leg to do. Worst case scenario, wait for your credit to improve and reapply for a “prime” card.
Two final tips: If you are successful transferring your balance, don’t close that old card just yet, as closing a credit card can hurt your credit score. By all means avoid carrying a balance on it; just don’t close it.
If you aren’t successful transferring your balance, try calling your current card company and asking for a better interest rate. Point out that you have been responsibly paying on time and mention that you are shopping for new cards.
Have you been approved for good credit card deals with less-than-perfect credit? Turned down for any cards even though you have good credit? I’d love to hear.
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