More in my series of balance transfer pitfalls…
The credit card issuers warn you themselves about this common problem if you read the fine print.
I dug down into Citibank’s disclosures, and found the following line:
“You should not transfer the amount of any disputed purchase or other charge. If you do, you may lose your dispute rights.”
In other words, if you’ve got an outstanding balance on a old credit card that you’re currently arguing about, leave it be before even thinking about moving it to another credit card via a balance transfer.
Let’s look at an example:
Credit card balance: $5,000
Disputed balance: $500
Balance transfer offer: 0% APR for 15 months
While the 0% APR balance transfer offer may be tempting, be sure to leave that disputed $500 on the old credit card if you’re actively fighting it.
Once it’s transferred to the new card issuer via balance transfer, you’ll probably be out of luck.
Think of it this way – a balance transfer is essentially a payment, so if you agree to let another card issuer pay off that balance in full, the original card issuer will probably assume you’re accepting full responsibility for the entire balance.
So always think before you transfer.