Is it OK. to transfer balances on credit cards more than once when you receive better offers and should you close out the previous accounts?

Answer 1

The type of activity you describe can be very detrimental to your credit score. Applying for new accounts generates an inquiry into your existing credit file. This is viewed as risky and therefore lowers the score. New accounts also impact credit scores in a negative way. Obviously there is no way to discern how a consumer will pay in the future and there is no history YET to evaluate how they have paid in the past. So, new accounts impact your score for at least two years, although deductions taper off sharply after 6 months. You get no positive additions to the score for at least 6 months. After that time, history is established on a new account, but it is admittedly a small time line. All of this equals lower scores. Another area of impact is credit history. Anything under about a decade is considered "young" or "new" in credit. So closing an older, established account to take advantage of a better interest rate on another one can make the average length of time you have had credit "younger". Once again, less time to evaluate how you manage debt, equals deductions. Any strategy impacting credit scores need to be placed within the context of your life. If you do not need to make any major purchases within two to three years, and can find a better rate with less fees, it might be worthwhile to exchange cards. If, on the other hand, you want to buy a car or get a mortgage in the future; changing revolving accounts simply because the grass looks greener can be very expensive.