A credit card balance transfer can both positively and negatively affect your credit score. On the positive side, transferring a balance from a high-interest card to one with a lower rate will reduce your interest expense and better position you to consistently paydown your debt. A balance transfer could also lower your credit utilization ratio. Both these outcomes will strengthen your credit score.

However, when you initiate a balance transfer, the process typically entails a hard credit inquiry, which can adversely impact your credit score. Additionally, opening a new credit card will undoubtedly lower the average age of your credit accounts, which can also hurt your credit score.