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[Update: Some offers mentioned below have expired. You can view the current offers from our partners here —Citi Diamond Preferred, Discover it, Citi Double Cash and Chase Slate. Disclosure: Cards from our partners are mentioned below.]

If you’re struggling with credit card debt that you just can’t seem to get out from under, one of the best ways to break free from that debt is to use a 0% balance transfer card. Doing so saves you money in the long run since you won’t be paying interest charges while you work on paying down that balance.

What You Need to Know

First, applying for a new credit card of any kind can end up dinging your credit just a little. That’s because credit card issuers do what’s known as a “hard inquiry” to determine if you qualify for their product. That check of your credit can have a small and temporary effect on your credit scores, but it’s typically more than offset when you’re approved for the new card because your credit utilization improves with the new line of credit. And as soon as you start whittling away at your outstanding debt with your new balance transfer card, your credit is likely to improve even more. (If you don’t know where your credit currently stands, you can get your two free credit scores, updated every 14 days, on Credit.com.)

The five big factors in determining your credit score include your credit utilization, payment history, types of credit, credit inquiries and the age of your accounts. Here’s an explanation of each and how they are potentially affected when you apply for and use a balance transfer credit card:

The 5 Components of Your Credit Score

1. Credit Utilization
What it Is: This is basically the amount your currently owe on your revolving credit accounts, and makes up 30% of your total score. If you keep your balances to less than a 30% of your limit, and preferably 10%, you’ll be doing your credit scores a huge favor.
How it’s Affected: Suppose you owe $10,000 on Card A, which has a limit of $12,000. You’re using 83% of your available credit. But now you open Card B and move all $10,000 onto it (it has a limit of $10,000). You are now using a total combined available credit of 45% (a combined $22,000 on both cards). The new lower credit utilization could help boost your credit score.

2. Payment History
What it Is: This is the most important part of your credit scores and counts for 35% of your total. That’s why it’s so important to make your payments on time and avoid having your accounts go into collections at all costs.
How it’s Affected: If you made regular, on-time payments on the old card, and continue to make regular, on-time payments on the new card, you shouldn’t see any change here.

3. Types of Credit
What it Is: This is worth 10% of your score and in this area, diversity is key, so having a good mix of credit cards, auto loans, mortgage loans and even personal loans will help give you a good score.
How it’s Affected: Since you probably already have a credit card if you’re looking to transfer a balance to a new card, you likely won’t see much, if any, difference here.

4. Credit Inquiries.
What it Is: This area makes up 10% of your credit scores. Too many credit inquires at the same time can drop your score.
How it’s Affected: Applying for a new card will put an inquiry on your credit. As long as you’re not applying for multiple cards, a single inquiry will have a very small effect.  Probably only dropping your score by less than 5 points.

5. Age of Credit
What it Is: The longer you have been responsibly using credit, the better your score in this area. It accounts for 15% of your total score.
How it’s Affected: Once you get your new card, hang on to your old one. Don’t cancel it. Here’s why: You want to keep your oldest cards open so that your active credit has as long a history as possible. Plus, if you close the old card, you won’t get the benefit of a score boost in your credit utilization, as explained above.

Your Credit & Balance Transfer Cards: The Bottom Line

Opening a new account and transferring the balance over should save you money in the long run, and have a positive impact on your credit score — so long as you don’t transfer your old balance and then turn right away and charge up a new one. Don’t expect a huge jump at the very beginning, but as you continue to pay down your balance by making timely payments, you should see some incremental improvement.

But is a balance transfer right for you? There’s no one-size-fits-all answer here. It depends on the size of your debt, the interest rate, your income, your current credit score, and how soon you think you can wipe out your debt.

Some of the credit cards with the longest 0% introductory APR offers on balance transfers include:

  • The Citi Diamond Preferred leads the pack with 21 months interest-free financing for balance transfers and purchases. (Full Disclosure: Citibank advertises on Credit.com, but that results in no preferential editorial treatment.)
  • The Discover it card, also offers 21 months interest-free financing on balance transfers and six months for purchases
  • The Citi Double Cash card offers 18 months interest-free financing on balance transfers
  • The Chase Slate card offers 15 months interest-free financing, plus no transfer fee if you transfer your balance within 60 days of approval

One consideration is whether you can pay off your debt during the 0% introductory APR period. If you feel your debt is too big to pay off in 15, 18 or even 21 months or you’re worried about running up a balance on both cards, you could consider taking out a personal loan to pay it off. You won’t get the 0% interest offer, but you will likely get a significantly lower overall interest rate than the credit card will offer after the introductory period ends and you’ll have a set date that your debt will be paid off by. (You can learn more about getting an unsecured personal loan here.)

Whatever decision you make, you can rest assured that applying for an using a balance transfer credit card won’t severely damage your credit so long as it used it as intended. And, if used properly, there’s a very good chance your credit score will improve.

At publishing time, the Citi Diamond Preferred, Discover it, Citi Double Cash and Chase Slate credit cards are offered through Credit.com product pages, and Credit.com is compensated if our users apply and ultimately sign up for these cards. However, this relationship does not result in any preferential editorial treatment. This content is not provided by the card issuer(s). Any opinions expressed are those of Credit.com alone, and have not been reviewed, approved or otherwise endorsed by the issuer(s).

Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.

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