According to Mint reports, credit card balance transfers generate hard inquiries that temporarily lower credit scores and average credit age. As explained by Anand Agrawal, Co-founder of FixMyScore & Credgenics, balance transfers create a trade-off that generates hard inquiries and new accounts, which can briefly lower scores and average credit age while resetting utilisation ratios. The greater risk lies in behavior rather than calculations, as many borrowers transfer balances, feel relief, and subsequently run up original card balances again.
As reported by Mint, Rohit Mahajan, Founder & CEO of plutos ONE, highlights that India currently has more than 12 crore credit cards in use and collective credit card spending exceeds ₹2 lakh crore per month. Lenders view repeated balance transfers with caution, as they may indicate underlying repayment stress and financial management difficulties rather than prudent financial planning. Repetitive transfers are a point of interest for lenders when appraising prospective loans, as they might suggest the applicant is in financial trouble or lacks discipline.
According to Mint reports, while balance transfers may help lower credit utilisation and assist in orderly debt payoff, borrowers must have a repayment plan in place. Mahajan emphasizes that just paying one debt with another is not viable if the debtor continues spending money. The key goal should be developing good banking habits: paying creditors in full and on time, avoiding debt revolving, and staying within means. Balance transfers are not supposed to postpone the question but assist in permanently getting rid of debt.
As reported by Mint, balance transfers should be the best option for debt management but not taken as a long-term financial strategy. Relying on repeated transfers without addressing root causes of debt can weaken credit profiles and overall economic prosperity. When used strategically and responsibly with disciplined spending and timely repayments, balance transfers can help support credit health and improve individual credit scores over time. The fundamental principle is that balance transfers should be a tool for debt elimination, not a strategy for debt postponement.
