Applying for Balance Transfer Credit Cards with Fair Credit

A new credit card with a low introductory APR on balance transfers can be a great option to help you pay down debt and improve your creditworthiness. However, a balance transfer credit card usually requires at least a fair credit score, and some issuers may deny your application if you don’t have good or excellent credit.

Let’s explore the likelihood of getting approved for a balance transfer card with a fair credit score and how you can use a balance transfer offer to improve your creditworthiness.

What is fair credit?

The term “fair credit” refers to a specific range of scores within a credit score model. Credit scores help credit card issuers decide whether to approve a credit card application and determine certain terms on the card if approved, such as the credit limit and interest rates that apply to certain transactions like purchases and balance transfers after any low introductory APR offers expires.

Having a fair credit score means that some card issuers may consider you a subprime borrower, and you may not qualify for a new credit card with a low introductory APR on balance transfers.

While different issuers may use different credit score models to calculate your credit score, common factors that typically contribute to your score include your payment history, credit mix, credit history and credit utilization.

Finding a balance transfer credit card with fair credit

Customers with fair credit may have difficulty being approved for a new credit card with a low introductory APR on balance transfers. If you’re having trouble finding a balance transfer credit card that works for you, consider taking steps to help improve your credit score before applying.

How to manage balance transfers to improve your credit score

If you are approved for a new balance transfer card with a low introductory APR offer, you should focus on paying off as much transferred credit card debt as you can during the offer period to help improve your creditworthiness and avoid higher interest charges after that period ends.

While meeting your monthly minimum payment on time is important to avoid penalties, putting more than the minimum towards every credit card payment can help build your credit. You should also avoid making new purchases on the balance transfer credit card since you may be charged interest on those purchases unless you pay off the statement balance, including the entire balance transfer amount, by the payment due date each month. Check the terms of your credit card agreement to know how best to use your card.

Balance transfer credit cards also typically charge a balance transfer fee, which will often either be a percentage of your transferred amount or a flat fee, whichever is greater.

Improving credit with a balance transfer

Credit cards with low introductory APR offers on balance transfers can temporarily help prevent your debt from accumulating high interest charges. This means that your credit card debt may be easier to manage and pay off, which may, over time, lead to improved creditworthiness. Remember, though, that the low introductory APR on these cards lasts for a limited time and may not apply if you miss payments. If this happens, you may find it more difficult to improve your credit.

If you use a balance transfer offer on a new credit card to pay off another credit card entirely, keeping the old account open may be a better option than closing it. If you don’t increase the spending on all your credit cards, keeping the old account open could help decrease your credit utilization ratio since you will have more available credit. Keeping the account also increases your average credit account age. Both of these factors can help improve your credit. Be aware, however, that if there is an annual fee on the card, it will continue to be charged as long as the account remains open.

If you pay more than the minimum amount by the due date each month on all of your credit card accounts, keep each of these accounts open while decreasing spending across the accounts to lower your credit utilization ratio, and pay off existing balances with the help of a balance transfer offer, this can help you improve your credit.

Disclosure: This article is for educational purposes. It is not intended to provide legal, investment, or financial advice and is not a substitute for professional advice. It does not indicate the availability of any Citi product or service. For advice about your specific circumstances, you should consult a qualified professional.


Additional Resources

  • Utilize these resources to help you assess your current finances & plan for the future.

  • Learn how FICO® Scores are determined, why they matter and more.

  • Review financial terms & definitions to help you better understand credit & finances.