A balance transfer can initially hurt your credit score in two ways. First, applying for a new credit card to facilitate the balance transfer can result in a hard inquiry. According to FICO, a single hard inquiry takes less than five points off the credit scores of most individuals and will stay on your credit report for two years. Inquiries account for 10% of your FICO score. These hard pulls are noted on your credit report and can lead to a small, temporary drop in your credit score.
Second, getting a new balance transfer card lowers the average age of your credit accounts. Credit age, or the length of your credit history, is a factor in calculating your credit score. This accounts for 15% of your FICO credit score. A shorter credit history might be seen as less stable, potentially resulting in a lower credit score.
If you’re transferring to a card you already have, the balance transfer won’t hurt your credit. Just be on the lookout for your credit card’s balance transfer fees. Some cards (such as the Citi Double Cash and Chase Slate Edge cards) charge higher fees if you transfer a balance after their promotional period.
Despite this, balance transfers aren't necessarily bad for your credit in the long run. They can improve your credit if you make the most out of them.