Perhaps the last thing to come to your mind when you're stuck in a mounting credit card debt is to shop for a new credit card. This venture will most likely fail or leave you crying over your ruined credit rating. However, card companies are so eager for your business that they've provided for suchlike situation through inventing balance transfer credit cards, special cards which you can move your current debt on.

For some people a balance transfer is not only the sole way to reduce debt but also a good chance to do it interest-free.

Balance transfer credit cards are thus getting more and more popular among savvy cardholders and are forming one of the fastest growing sections on the credit consumer market. However, there are some customers claiming that a balance transfer puts their credit score down as opposed to their expectations. Let's find out why.

So, the question is do balance transfers affect your credit score, and if yes, then why? Well, the answer really depends on what card you choose and how you go about the whole thing. Financial and credit experts strongly advise that you apply for a balance transfer card with a limit no less than the amount of debt you have on one or several of your current credit cards.

Otherwise, you won't qualify and a creditor's denial will hurt your credit score. Unfortunately, most issuers do not disclose their credit limits in credit card features, so this is all about a matter of luck. One thing is sure, the higher your credit score is, the higher limit you are likely to get.

Then, there is another thing about balance transfers that can affect your credit score but that is often neglected - it is the way you dispose of the credit cards you moved balances from. Some customers hurry to close them immediately, sticking to wise credit use tips which go as "having more than two credit lines open will put your score down".

In fact, the well-being of your credit score depends on lots of various factors and one of the most significant factors is your credit card debt ratio, or the percentage of available credit. To keep your credit score in good standing, you should keep this percentage as high as possible.

So if you have a credit card with a $10 000 limit, you should avoid carrying more than $50 000 in debt as the percentage of available credit drops, pulling down your score.

The same goes true to balance transfer strategies. If you close your accounts right after the balance transfer, the limit available will drop but the credit card debt will remain the same. You may guess the effect - your FICO scores will get a hit.

Thus, to minimize the risk of damaging your credit, leave the old credit cards open but do not use them to avoid accumulating balances and increasing your credit card debt ratio.

In all other aspects, a balance transfer card is a very effective device to pay off your high interest balances and boost your credit rating. Some cards come with excellent promotional programs such as no balance transfer fee, very low or 0% introductory APR which may last as long as a year and even rewards programs.

Using a balance transfer card wisely, you will turn the page onto a better, debt-free credit history.

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