When you take advantage of balance transfer offers (when you move all or part of the outstanding balance on one credit card to another account), you affect your credit scores in several different ways. First, you are applying for a new account (which creates a new inquiry on your credit reports); opening a new account (which may bring with it an additional credit line, a good thing); and also adding a balance to that account (which effects your revolving utilization). All of these things will have an impact on your scores. The exact impact will be different for each person.
Undisciplined consumers often fall deeper into debt when they take advantage of balance transfer offers. That being said, as long as consumers manage the balance transfer wisely, it can be an effective way to reduce their interest rates.
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