Are Balance Transfers Safe?

If you’ve been thinking about executing a balance transfer, you may be wondering if they’re safe.

Well, as with anything that involves your money and personal finances, you need to do your due diligence.

First and foremost, ensure you’re working with a reputable company.

If you’ve never heard of the company, do some research online first to see if they’re trustworthy.

Providing Intimate Details

After all, you’ll need to provide sensitive information to the balance transfer issuer in order to actually carry out the balance transfer.

Things like your credit card or account number, and your social security number.

This is all standard procedure, similar to what you’d need to offer up if you were applying for a new credit card.

The only additional information you’d provide on a balance transfer application would be the existing credit card information.

(How balance transfers work.)

But because you’re likely dealing with two major credit card issuers (or banks), there shouldn’t be too much to worry about.

In fact, you’ll probably be dealing with two multi-billion dollar companies, so safety concerns will be minimal.

Sure, there are some smaller banks that offer balance transfers, but most are still relatively large, FDIC insured, and all-in-all dependable.

Regardless, the majority of consumers will likely transfer credit card balances between the likes of American Express, Bank of America, Capital One, Chase, Citi, or Discover.

If you don’t recognize these names, I’d be pretty surprised.

Assuming you do, there isn’t too much to worry about from that standpoint.

What About Your Credit Score?

Now, you may be worried about carrying out a balance transfer for other reasons, such as the impact it may have on your credit score.

Well, like any application for new credit, you may see a temporary credit score ding related to the balance transfer.

This relates to your heightened risk when you “need new credit.” It’s not a big deal, just a standard signal creditors take in anytime you apply for something.

The good news is that over time, the balance transfer should actually improve your credit score as the debt is paid down and your credit utilization improves.

The idea being that you’re executing the balance transfer to pay down your debt, not simply to shift it.

And it’ll be a lot easier to pay it off without pesky credit card finance charges accruing each month!

In summary, don’t fret. If you have any questions along the way, both banks or credit card issuers will be more than happy to help if you call them directly.

Tip: What credit score do you need for a balance transfer?