If you have fair credit and need a balance transfer credit card, you’re probably having a tough time finding one. The fact is, there just aren’t many 0% credit card offers for fair credit on the market these days.
So why is this, and what should you do if you have average credit and want to refinance your debt? The Nerds will help you sort through these questions in the details below.
Balance transfer credit cards for fair credit: It’s slim pickings
The truth hurts, but in this case it needs to be told: Unless you have good or excellent credit, it’s going to be very tough to find a 0% balance transfer offer.
Here’s why: Credit card issuers use 0% promotions to bring in new business, and they’re only interested in targeting people with high FICO scores. Remember, credit cards are a somewhat risky product for banks. Because they’re unsecured, issuers like to see a good or very good credit profile before doling out the plastic. This increases their confidence that they’ll get repaid.
With fair credit, you’re perceived as a chancy borrower. Until your FICO score improves, there’s no big incentive on the issuer’s end to bring you on board. As a result, primo balance transfer offers simply don’t exist for folks with sub-optimal credit.
Other ideas for refinancing your debt
If you’re trying to refinance high-interest credit card debt with fair credit, all is not lost. You might not be able to qualify for a 0% balance transfer offer, but there are other options. These include:
Applying for a personal loan at a local bank or credit union. Personal loans are a great option for reducing the cost of credit card debt, but with fair credit you likely won’t qualify for one on good terms with a major bank or online P2P (peer-to-peer) lender. But a smaller institution might be more sensitive to your financial situation – do some shopping around to find out.
Borrowing from a loved one. If you’re really in a bind, asking a friend or family member for a loan is a route to consider. This can be tricky, though; if you find someone who’s willing to oblige, be sure to communicate clearly about repayment expectations.
Finding a cosigner. If no one you know is willing or able to lend you money directly, asking a loved one to cosign on a personal loan or balance transfer card might be just the ticket. You’ll want to pick someone with good or excellent credit to increase your chances of getting approved. And if you do, make paying on time and in full a top financial priority. Otherwise, your cosigner’s credit could suffer.
Tips for improving your credit
Fair credit is standing in between you and a 0% balance transfer offer, so it’s time to focus on improving your FICO score. Here are the Nerds’ top tips:
- Pay your bills on time, every time. No excuses!
- Keep the balances on all of your credit cards below 30% of your available credit at all times during the month.
- Use your credit card consistently, and don’t charge more than you can afford to pay off in one month.
- Only apply for credit you actually need, and limit credit card applications to once or twice per year.
- Check your credit reports every year at AnnualCreditReport.com. If you find an error, take steps to have it corrected.
With all this information in hand, you should be on your way to better credit – and better credit card offers – in no time flat!