Advice - Should I do this balance transfer?

[Anonymous]

Hey everyone!  I was wondering if you guys can offer me some words of wisdom.  I recently received another balance transfer offer from Capital One and was wondering if I should transfer my AmEx balance over to the CapOne card.  The only thing is that my utilization on the CapOne will raise to 37%.  Will that affect my credit score at all?  Or does FICO only look at overall  utilization? I applied and got a Discover More card a couple months ago and wanted to do some balance transferring to that card but got a VERY disappointing $500 limit so I can't do crap with that even though it's 0% APR for 10 more months!   I know $590 doesn't seem like that much but I'm cutting down on work to focus on school (gotta get extremely good grades to get into nursing school, especially here in California!) and it might take me some time to pay it off.  Here's the info for the 2 accounts:

Capital One  -  $790 Balance / $3,750 Limit  @  1.99% (non-intro)

American Express - $590 Balance / $7,000 Limit @  12.99%

[Creditaddict]

If it's going to help you then I say sure, it is a small balance so probably won't raise flags with amex and won't cost you much interest rate wise but sometimes 1 payment is just a lot easier then 2!

[tonsers]

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@Anonymous wrote:

The only thing is that my utilization on the CapOne will raise to 37%.  Will that affect my credit score at all?  Or does FICO only look at overall  utilization?

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Your score is based on overall utilization as well as utilization on each account. 

[Anonymous]

Gee, Cap 1 with 1.99?  I got 4.99 from them and thought that was good!  I want 1.99. 

To answer your question, it is a personal call.  37% on just one card I wouldn't think should hurt you so much and the interest rate is a huge factor!  But, let me ask you first, what are they charging you up front to transfer it?  Best I heard of os 3%.  That makes your transfer really a 5.99% interest rate.  If you are going to run the balance for a long time, it might be worth it.  But if you plan to pay off sooner than probably not.

[Anonymous]

Yeah, I'm surprised at the 1.99% too!  Yep, it's a 3% transfer fee.  I probably won't be paying it off for awhile, so I guess it'll be best for me to go ahead and do the transfer.

Thanks for the advice!

[RobertEG]

The answer is yes, you will see some short term drop in your score.

FairIsaac has stated in its webinars that when scoring %revolving util, they weigh both overall utiliation and utilization of individual cards about the same.  Doing the BT will not change your overall %util.  Your %util on your current Cap1 is 20%, and is 9% on your Amex.

The BT will raise your %util on the Cap1 to 37%, and you Amex util is alreaqdy excellent.

But, if you dont plan to app for new credit in the near future, your FICO score is just academic, and doing the BT might be desirable from purely a financial point of view.  The 3% BT fee will cost you approx. $18, so factor that against the monthly interest that you are now paying Amex, and the numbers will tell you the finaancial benefit.

[Anonymous]

If you're going to do the BT, it might be worth calling Capital One's backdoor number and saying that you'd really like to take them up on this BT offer, but are hesitant because the higher % utilization on that card will affect your credit scores - they might just agree to increase your credit line a bit to offset any score damage. CapOne aren't exactly known for being generous with the CLs and CLIs, but as it looks like you have a pretty good one already, you must be one of those customers CapOne actually likes, so you might be in with a shot at an increase! Even if they agree to a small CLI, it's going to make the utilization once you do the transfer that little bit lower, and will mean that you'll get down below 30% (and below 20%, 10%, etc) on the card all the sooner! 

As far as I know, CapOne never does a hard pull for CLIs, so it can't hurt to ask - if they say no, you've lost nothing. If they say yes - great! 

[Anonymous]

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@Anonymous wrote:

If you're going to do the BT, it might be worth calling Capital One's backdoor number and saying that you'd really like to take them up on this BT offer, but are hesitant because the higher % utilization on that card will affect your credit scores - they might just agree to increase your credit line a bit to offset any score damage. CapOne aren't exactly known for being generous with the CLs and CLIs, but as it looks like you have a pretty good one already, you must be one of those customers CapOne actually likes, so you might be in with a shot at an increase! Even if they agree to a small CLI, it's going to make the utilization once you do the transfer that little bit lower, and will mean that you'll get down below 30% (and below 20%, 10%, etc) on the card all the sooner! 

As far as I know, CapOne never does a hard pull for CLIs, so it can't hurt to ask - if they say no, you've lost nothing. If they say yes - great! 

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  Hmmm, well the thing is that I asked for a CLI back in August I think, and got it raised from $2,500 to $3,750, do you think it's safe to ask again already?

[Anonymous]

Cap 1 is considered a conservative leader.  Since you just got a CLI I doubt they would go for another one so soon.

[upinflagstaff]

Cap1 tends to not consider changes to your account except every 6 months. Anything inside seems to be declined based on that six month figure - at least on my accounts.