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I want to transfer my existing credit card debt onto a 0% interest credit card. Will opening a new card damage my credit score?

As competition between credit facilities has increased, a number of news offers aimed at enticing potential customers have emerged. The most prominent of these being 0% balance transfers between an existing credit card and a new card. The facility allows a customer to carry a balance onto a new card usually with a twelve month grace period without interest to pay it back. If cleared in time the customer pays only the set up fee, if the balance is carried again after the offer has expired then the lenders interest rate will be applied.

The facility when used correctly provides a genuine and beneficial way to clear debt without incurring large costs, but are there negatives to doing so?

In order to be assessed for a balance transfer and a new credit facility a credit check is compulsory. If your application is successful and the credit check is independent from other checks in a short period of time this will have very little to no impact on your credit score. This is not the case if the check is failed or you apply for multiple cards in the short term which can be very negative on your overall credit score.

The negative impact is due to the multiple attempts to apply for credit being visible to each lender and assessed for every individual application for credit. This flags as a concern for lenders as it implies that you are being turned down by other lenders or applying for more credit than you may be able to maintain.

Your credit may also suffer short term effects of a successful application for a 0% interest card. This is Money also point out that “If you are accepted for a balance transfer deal, you should know it is likely your credit rating will dip for a short time simply because future lenders may want see evidence you are managing the new account well for a period up to six months”.

So ensure that you are visibly paying down the debt in the allotted time frame in order to keep your credit rating intact. Before applying for a new card, check your credit report which will help you to gauge how likely you are to be accepted, it will also show any other credit checks that have been carried out, if there are more than a couple in a short period it is worth waiting until these have matured.

It is also worth noting that you only have the card to use for the 0% interest on the existing balance. Many fall into the trap of spending more on the card without paying off the existing debt which can lead to problems when the offer ends.  If the steps noted in this blog are followed you may also be able to strengthen your credit rating and improve the offers you receive going forward, if you’ve also managed to pay off the debt you’ve fully taken advantage of the offer.

If you are struggling with debt issues, whether these are business or personal debts, The Debt Advisor Ltd which incorporates The Business Debt Advisor can help.  There are a range of solutions available which include both formal and informal solutions such as Debt Management Plans (DMP)Individual Voluntary Arrangements (IVA),  Bankruptcy as well as solutions for Businesses.

There is also free debt help and advice available through a variety of debt charities. For more information, we recommend you visit

The Debt Advisor is regulated by The Financial Conduct Authority and is also a member of the DRF and we adhere to their codes and standards.

Call us today on 0800 0851 825 to speak with one of our advisors. If you’re calling from a mobile you can reach us on 0333 9999 600.


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