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I have received card offers that have a low interest rate and I would like to transfer to the low rate card and save on the interest I am paying which is higher by 7%. I plan on paying off the balance with the new low rate and close the account because the rate is only good for a short period of time. Is this wise or should I not have the new inquiries on my credit repot even if the account is closed? I would like to do this to pay down my debt faster.
If you only have the one card balance to transfer and you don’t plan on transferring this balance more than this one time, it more than likely would not hurt your credit to have one inquiry from the new card on your report and may more than be worth the notation if you can reduce your APR (Annual Percentage Rate) by 7%. Whether you get the card you request or not, however, is of course up to the potential creditor. As long as you have not been applying around to lots of creditors shopping for card rates (which it sounds like you have not), you might benefit from the switch.
Just make sure that you read all of the details of the terms of use (normally on the back page) of whatever card company you are interested in. Some may offer a very low rate for transfers, but charge a very high rate for new purchases. Others may offer low transfer rates, but only for an introductory period of time.
Do your research and read, read, read.
For more information, you might want to check out “Choose The Right Credit Cards For Your Personal Finances.”
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