Does A Balance Transfer Affect Your Credit Score? – HSBC UK (2024)

FAQs

Does A Balance Transfer Affect Your Credit Score? – HSBC UK? ›

Any change to your financial situation can impact your credit score, including a balance transfer. If a balance transfer helps you tackle your debts and pay them off sooner, it will improve your credit score over the long term.

How do balance transfers affect your credit score? Even though balance transfers can help you tackle debt – thereby improving your credit score – they can hurt your credit score, too. If you apply for several different cards with low or 0% introductory interest rates, this can affect your credit score.

In some cases, a balance transfer can positively impact your credit scores and help you pay less interest on your debts in the long run. However, repeatedly opening new credit cards and transferring balances to them can damage your credit scores in the long run.

A balance transfer is when you move the balance from one credit card to another, usually to take advantage of a lower interest rate or interest-free period. This can help you to pay off your credit card balances in a more manageable way, at a lower rate and with one monthly payment.

Cons of Balance Transfers

If you're not disciplined, a balance transfer can lead to higher debt. Once the balance is moved, you might be tempted to spend more on your old card, potentially leading to more debt than you started with.

Applying for a new balance transfer credit card requires a hard credit inquiry, which may lower your credit score temporarily. Your credit score might also drop due to your new average length of credit history or if your per-card credit utilization ratio is too high.

Once the transfer completes, your balance drops to zero, or whatever is left in that you didn't transfer. For example, if you were unable to transfer the entire amount due to your new card's balance transfer limit, you'll need to keep making payments on your old card and won't have the option to close it just yet.

When you apply for a balance transfer credit card, a hard inquiry will appear on your credit report. One hard inquiry can have a small, temporary effect on your scores—but multiple hard inquiries in a short time can have a greater negative effect.

But in general, a balance transfer is the most valuable choice if you need months to pay off high-interest debt and have good enough credit to qualify for a card with a 0% introductory APR on balance transfers. Such a card could save you plenty on interest, giving you an edge when paying off your balances.

Ideally, the debt moves to an account with a lower interest rate or an introductory 0% APR. In many cases, a balance transfer can save you money, but there is a catch: The rate is an introductory rate, meaning that it will end after a certain period of time.

Does HSBC charge for transfers? ›

There's usually no transfer charge to HSBC customers, but international banks may charge the recipient an incoming transfer fee. Real-time rates are available 24 hours from Monday to Saturday, excluding bank holidays.

Is a balance transfer fee worth it? If you have a significant amount of credit card debt, the 3% balance transfer fee (or sometimes even a 5% fee) is absolutely worth paying when transferring your balance to a card that has a 0% intro APR offer, but only if you still need time to pay off a balance.

A balance transfer lets you move a balance from an existing credit or store card to another card with a different provider. With all of your borrowing in one place, your balances could be easier to manage. Plus, you could receive an introductory or promotional interest rate for a set period of time.

Card issuers typically have rules surrounding the amount of debt you can transfer in relation to your credit limit. Many issuers are generous, giving cardholders the ability to transfer their full credit limit, but in some cases, your transfer limit may be capped at 75 percent of your overall credit limit.

Credit scores aren't shared between countries, partly because data protection laws vary.

When you transfer a balance you're essentially paying off one credit card with another. So it should count as a payment once the transfer is complete. Check your lender's terms to be on the safe side.

Credit transfer university UK; recognition of prior learning, as credits towards a new degree programme, can be possible. This can apply both to transfers within the UK and elsewhere in Europe or globally.