Can You Get A Balance Transfer Credit Card With Bad Credit?

Jenn UnderwoodPersonal Finance Writer

Credit cards and banking specialist Jenn Underwood brings over 16 years of personal finance experience to the table. After a decade of teaching courses in banking, debt reduction, budgeting and credit improvement, she moved into writing content and fintech product development. Over the last four years, Jenn has contributed to Forbes Advisor and a variety of fintech companies. She has served as a UX consultant, moderated discussions on open banking and been a guest on a number of personal finance podcasts.

Jenn Underwood

Jenn UnderwoodPersonal Finance Writer

Personal Finance Writer

Dylan PearlDeputy Editor

Over a decade of editorial experience across a number of publications and more than 60 countries visited have given Dylan Pearl a wealth of travel knowledge, and the tools to effectively communicate that knowledge to others. Dylan has made it his mission to see as much of the world as possible, and strives to give everyone the tools to get out and do the same with simple, actionable information.

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Dylan Pearl

Dylan PearlDeputy Editor

Deputy Editor

Fact Checked

Updated: Aug 23, 2023, 9:00am

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Table of Contents

If you’re stuck with a balance on a high-interest credit card, you may have heard a balance transfer is a great option. But with most financial advice, you’ll need to determine if this option works for your circumstance. If you have bad credit, a balance transfer may not be the easy win you’re heard about.

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Are There Balance Transfer Credit Cards for Bad Credit?

Currently, there are no balance transfer credit cards that are specifically marketed to people with bad credit. There are, however, a few aimed at people with fair credit.

Some credit cards offer attractive promotional periods with a low or 0% annual percentage rate (APR) on balance transfers for a limited time. This makes them an appealing option for those looking to consolidate debt or pay off existing credit card debt. These cards are typically limited to individuals with strong credit to limit lender liability. In fact, issuers often restrict the credit limits for cardholders with bad credit to under $1,000.

Key factors in a bad credit score are missed or late payments, high credit utilization or other negative factors such as bankruptcy that make borrowers riskier in the eyes of credit card issuers. As a result, applicants with bad credit may not be eligible for the most competitive credit card offers, including those with balance transfer promotions.

Should I Do a Balance Transfer With Bad Credit?

Debt can be overwhelming, so a balance transfer may seem like a quick and easy fix. But if you have bad credit, doing a balance transfer can be a bit trickier and may not be your best option.

Balance transfers are generally most beneficial for individuals who qualify for a promotional APR on the transferred balances. The goal is that the reduced interest rate allows you to save on interest and pay down debt faster.

Unfortunately, low APR transfer rates are usually only available to those with good to excellent credit. Most lenders use the FICO scoring model, so a good credit score would be 670-739, a very good score is 740-799, and an excellent FICO score would be over 800.

Even With Great Credit, Balance Transfers Aren’t Free

Even if you’re eligible for a 0% or low APR balance transfer, there are still additional costs involved. Most card providers charge a 3% to 5% fee on balance transfers. If you transferred $1,500 to a card that has a 3% balance transfer fee, you would pay a $45 fee.

Depending on the balance transfer card you choose, any new purchases you make with the card may accrue interest as normal. And, of course, you will pay interest on any remaining transferred balance following the promotional period. Before applying for a balance transfer, evaluate how quickly you can pay off the balance and consider what your APR will be on the remaining balance.

Other Concerns With Transfers

If you are approved for a balance transfer with less-than-stellar credit, the standard APR you receive (which will apply after the promotion) may be higher than what would be offered to someone with better credit. If you expect to have a remaining balance after the promotion period ends, higher ongoing interest rates could negate the benefits of the balance transfer.

The process of applying for a new credit card and transferring balances can have a short-term impact on your credit score. Additionally, if you max out the new credit card, it could negatively affect your credit utilization ratio, which is a significant factor in credit scoring.

Alternative Debt Payoff Strategies for Bad Credit

Negotiate a Better APR

Instead of focusing on a balance transfer, it might be more beneficial to contact your current card provider. If your account is in good standing, you may be able to ask for a reduced APR. Experian recommends beginning with the account you’ve held the longest. If you’re struggling to make your payments due to job loss or temporary set back, you can ask them about an alternative payment plan instead.

Make a Plan

Be strategic about your pay off plan. One popular strategy involves ordering all your debts from smallest to largest and paying off the smallest debt first while making minimum payments on the others. Once the first debt is paid off, you move on to the next-smallest one. This method is known as the debt snowball method. It provides a sense of accomplishment as debts are paid off, motivating you to continue the process.

Standing in contrast to the plan above is the debt avalanche method. With the debt avalanche, you list your debts from the highest to lowest APR. Focus on paying off the debt with the highest interest rate first while making minimum payments on the others. This strategy saves you more on interest charges over time.

Consolidate Your Debt

Common debt consolidation options include personal loans, peer-to-peer lending or working with credit counseling agencies. For those with bad credit, these options could be more accessible than balance transfer cards and could help you manage your debt effectively.

If you qualify for a personal loan, it can be used to consolidate your debts into a single loan with a fixed interest rate. Compare the terms, origination fees and APR carefully, and make sure to carefully vet each lender. You can contact a credit counselor if you have questions.

Credit card debt is unsecured, which means there is no collateral that the bank can collect if you are unable to pay. When consolidating unsecured debt, make sure that you avoid secured loans like a title loan or home loan that could put your house or car on the line if your finances don’t improve.

Increase Income and Reduce Expenses

If possible, look for ways to increase your income, such as taking up a part-time job or freelancing. Also evaluate your budget for ways to reduce expenses to free up more money to put towards your debts. Consider rotating your subscription services or shop around for a more affordable phone carrier or car insurance provider.

Improve Your Credit Score

Instead of focusing on a balance transfer, it might be more beneficial to work on improving your credit score first. This can be done by making timely payments, reducing outstanding debt and avoiding taking on new debt. This includes refraining from opening new credit cards or using high-interest payday loans.

Bottom Line

Those with bad credit are unlikely to qualify for a balance transfer credit card, but there are other options. Look for ways to increase your income, reduce your spending or move into a lower interest rate through negotiation or consolidation. Remember getting out of debt takes time and discipline. Stay committed to your chosen strategy and don’t hesitate to ask for help.