Q&A: Should I Transfer My Credit Card Balance Now?

Question: I know that a lot of the credit card rules are about to change. At the same time, I’m interested in switching to a lower-interest credit card. Should I do that now — or wait for the new rules to kick in? — L. Strouse, Chalfont, PA

Answer: A timely question, indeed. The short answer is to disregard the new credit reform rules, and base your “new card” decision on what your interest rate is right now and what kind of deal you can get from a new card based on your credit history.

The fact is, all credit card companies face the same new rules when credit card reform fully kicks in on Feb. 22. That means all card holders should benefit from limits on interest rate hikes, more time to pay their bills, more transparency from card companies (especially when it comes to letting you know about card terms and fees) and the right to opt out of any changes to your card.

That said, if you’ve already accumulated higher card rates because you’ve gone over your credit limit, or have been tardy paying a bill, a change of scenery to a lower-rate credit card may be a good idea — if you can pull it off.

Here are a few rules of thumb when deciding to switch credit cards:

Good credit is the real priority. It’s actually a Catch 22. Yes, there are some good 0% credit card transfer deals out there. But you need good credit — ideally a FICO score of 700+ to get them. You’ll likely save more money by improving your credit score than by prioritizing any credit card reform date.

Study up on card balance transfers. The lure of a lower credit card rate is a bit of a siren song — it’s easy to grab the first deal you can get as long as you see a lower interest rate than the one you’re carrying now. But take the time to learn how balance transfers actually work.