One of our readers, Melody, sent us this question:

Hi,

I had opened up a new credit card with the hopes of transferring a balance, unfortunately, the new credit card gave me a very small credit limit. Would it be detrimental to my credit score to open up another credit card so I can proceed with a balance transfer? Or will I be dinged hard for opening 2 credit cards in a 6 month period and if so, will this affect my APR on my current credit cards?

Thank you so much for your time and your informative website!

With sincerity,
Melody

Thanks for your question Melody!

Yes, your credit score will take a hit if you open up another account, but it won’t be a huge one. New credit accounts only effect ten percent of your credit score, so you are safe to do that if you want to.

Opening up a new line of credit should not affect the APR on your current credit card accounts. Usually only paying late will cause a company to raise your APR.

One caveat: The universal default policy is still in effect for some credit cards, but it is not as common as it used to be. If one of your cards does raise your rate, I would call them. As long as you have a history of on time payments, they should lower the APR again for you without giving you any trouble.

Now it does worry me a little that your new card only allowed you to have a small balance. In this case, I would recommend checking to see exactly what your credit score is before applying for anything else. You can click here to get started with that.

If your credit score is approaching the low 700’s then you may want to wait and just focus on paying down your current credit card as quickly as possible without opening any more new accounts. Give it three or four months (if you can afford to pay the extra interest) and then balance transfer.

If your score is over 720, then I would go right ahead and try to open up a specific balance transfer account - not just a new credit card. Most credit card companies will offer you a better deal if you balance transfer as part of the new credit card agreement.

So, make sure you respond to a “balance transfer” offer, and not just a “new credit card” offer. We have a whole section devoted to balance transferring credit cards - where you can compare rates and terms, and see which ones might be a good match for you. Hopefully you can find one there that will help you get a better interest rate and save some money.

Thanks again for your question!

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