Credit – Protect your score from card-hopping

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Opening a new zero-interest card account every few months may seem like a money-saving idea, but it could sink your credit score. A number of factors go into calculating your credit score. How often you’ve applied for credit recently is one of them, and so is the percentage of available credit you’ve used.

Each new card may knock your credit score down a little more. However, if you have a long credit history, the drops may be less steep. The dip in your score may last just six months – unless the new card brings new trouble with it.

* Watch out for high balance transfer fees, low introductory rates that skyrocket after a few months, and any other fees that will make a switch more expensive than keeping the old card. These could boost your debt instead of slashing it.

* Be careful about transferring a hefty balance to a zero-interest or lower-interest-rate card. If the transferred balance is more than half your new card’s credit limit, that transfer may trigger a credit score drop. Pay that debt down below 50 percent of the limit, and your credit score should recover.

* Avoid card-switching or opening new cards if you plan to apply for a car or home loan in the next 12 months.

While switching to a zero-rate cards has helped some consumers pay down their balances, card-hopping can still be a risky strategy, and it’s not right for everyone.

Instead of card-switching, look into other solutions, such as Bankrate’s Pay-down Advisor. Visit www.bankrate.com and click Credit Cards. Scroll down and click the link, Pay off balances quickly under Pay off your debt. Answer the questions to find various solutions you can try.



All the best,



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