Does Paying a Credit Card With Another Credit Affect Your Credit Score?

Shifting a credit card balance from one lender to another will not reduce your overall debt.

Shifting a credit card balance from one lender to another will not reduce your overall debt.

You can't generally help your credit score by paying off existing credit card debt with other cards. In many cases, you may actually hurt it. Since a lot of variables go into your credit score, it can be hard to predict exactly the effect of shifting your debt around. Certain strategies may prove more helpful than others.

Payment History

The most important part of your credit score -- 35 percent of it -- is your payment history. Transferring a balance from one credit card to another will have no effect on this part of your score unless you stop making payments after you move the debt. Making payments on time after the transfer can help offset any other negative effects you may experience.

Amount of Debt

When you transfer a credit card balance, the total amount of your debt does not change. However, if you can move a balance from a higher interest rate card to one with a lower rate you might be able to pay down your debt faster. In that case, your score will improve, since the amount of debt you owe makes up 30 percent of your credit score.

Credit Utilization

Your credit utilization percentage is a reflection of the amount of your available credit you're using. If you have $5,000 of debt and a $10,000 credit line, your credit utilization is 50 percent. Your overall credit utilization will not change if you transfer a balance. However, the FICO credit scoring model also takes into account the percentage you use of each individual card. Having any card with a utilization above about 30 percent can harm your score. If you use your entire credit line on a particular card, your score can go down dramatically, even if your utilization on other cards drops to zero.

New Credit

Every time you apply for or open a new credit card, your score ticks down a few points. If you open a new card to process your balance transfer, your score could end up falling. Using existing cards for your transfer will not affect this portion of your score, which represents 10 percent of your overall FICO score.

About the Author

After receiving a Bachelor of Arts in English from UCLA, John Csiszar earned a Certified Financial Planner designation and served 18 years as an investment adviser. Csiszar has served as a technical writer for various financial firms and has extensive experience writing for online publications.

Photo Credits

  • Jupiterimages/Comstock/Getty Images