3 Reasons Not to Do a Balance Transfer This Month

If you're juggling credit card debt, you're not alone. As of the third quarter of 2023, Americans owed $995 billion on their credit cards, says TransUnion.

It's one thing to be managing a single credit card balance. But if you owe money on multiple cards, that may be even more stressful. And it may be reason enough to look into a balance transfer credit card, where you move your various balances onto a single credit card.

There are a couple of benefits to going this route. First, you might snag a 0% introductory offer that gives you a reprieve from accruing additional interest on your balance for a period. Secondly, you may be less likely to get hit with late payment fees if you only have to remember to pay a single bill every month.

But while a balance transfer could be a good option for some borrowers, that may not hold true for everyone. Here are a few reasons you may want to pass on a balance transfer in January.

1. Your credit score recently took a dive

Maybe you added a lot to your debt pile during the 2023 holidays, and your credit score is now in the dumps. Or maybe you fell behind on bills last year due to lingering inflation and your credit score reflects that at present.

Either way, the lower your credit score, the less attractive a balance transfer offer you might be looking at. Also, you may not even be able to qualify for one if your credit isn't in good shape.

Ultimately, each credit card issuer can decide if your score is high enough to qualify for a balance transfer. But generally, if your credit score isn't at least in the mid-600 range, you can expect to have some difficulty.

2. Your only available offers come with a shorter introductory period

Some balance transfers give you a 0% interest rate on your debt for a period of 18 months or longer. That gives you a decent chunk of time to get your debt paid off before that intro period ends.

But you may want to pass on a shorter introductory offer. If you only get, say, 12 months to pay off your balance, that may not be enough time to get it whittled down to $0. And once your introductory period expires on a balance transfer offer, the interest rate on your remaining debt could skyrocket.

3. You think it'll take years to pay your debt off

It's one thing to owe $1,000 or so on some credit cards you're looking to pay off quickly. But if you owe, say, $5,000 or more, then a personal loan could be a better move for consolidating your debt.

At that point, with a balance transfer, your debt is likely to linger beyond your card's introductory period, leaving you to potentially rack up loads of credit card interest. With a personal loan, you get the benefit of a fixed interest rate. And while you generally won't find a personal loan with a limited 0% period, all told, the interest you pay on a personal loan has the potential to be a lot less than the interest you might pay on a credit card -- even one where no interest accrues for a period.

There's nothing wrong with looking into a balance transfer if you're struggling to keep up with your credit card debt. But consider carefully whether doing one is the right way to get ahead of your debt. You may find that there's a more suitable alternative.