Debt consolidation and balance transfers

Sevenfeet · ‎05-07-2016

Three years ago I successfully did a huge (for me) app run that netting me multiple high limit credit cards. Then my wife spent a long time either unemployed or underemplyed. That and high medical costs with a special needs child ended up maxing out our cards (but we've still managed to pay them on time). Now she has a new job at a good salary and so I'm looking at how best to attack our problem. For the sake of simplicitly, I'm not listing my wife's cards right now since they are less of a problem.

Bank of America Cash Rewards - Limit $20K

Amex BCP - Limit $20K

Fidelity Amex - Limit $20k

Citi Thank You Preferred - Limit $9k

US Bank Cash + - Limit $7500

Discover - Limit $4500

We've decided to pull up to $45k from savings in order to get the problem under control. The issue is that I'd like to use balance transfers to accelerate the process. But none of my "big 3 cards" are offering them to me right now, probably because my cards are near their limits.

My question is this...should I concentrate on paying off completely two of the $20k cards like the BofA card and the Fidelity and hope that a balance transfer offer shows up once the balance is at $0? Or is it better to spread out the money to get many of them below 50% utilitization? My FICO is at 693 right now, Equifax is 711...again, decent scores considering my situation since we've not been late in payments to anything. The Discover and US Bank cards are the highest interest rates and I'd like to get them gone first but I'm trying to do a comprehensive plan here.

Anonymous · ‎05-07-2016

Discover is the only one of those that I've had any recent experience with and having them offer BT. People say they get offers on their Cash+, but mine is right at 12 months and I haven't to date. But given those are the highest rates and smallest balances, I'd pay them first. Years ago I used to get BT offers from Citi. I have the same card as you, but I don't remember if I got it on that or something else I had of theirs or both. But I think others have had offers on Cash Rewards. If that's true I'd say pay off Discover and US Bank ($12k), pay off the Cash Rewards (+20 to $33k) and the remaining $12k I'd split up in some reasonable manner to un-max the others. All else being equal, I'd probably next focus on paying off the smaller TYP, but it depends if there are drastically different interest rates beyond those two higest ones.

jeffery581 · ‎05-07-2016

I agree with turtle.

Interest being paid on credit cards is much higher than interst earned on savings. Can you pull more from savings?

Sevenfeet · ‎05-07-2016

$45k-$50k will be our max on dipping into savings. I'm just trying to do this as expediantly as possible. The typical rule of thumb is to go to the highest rate cards and bury them first...which we can certainly do. After that, I would love to use one of the $20k cards to freeze another $20k card for a year or more. But none of my cards are offering that and probably won't until I pay down one. I think the most likely target is BofA which is still doing this for other people I've seen on the forum, but the Fidelity Amex is also an intersting target since it will be managed by Citi in a few months and a clear card there might be a business opportunity in their eyes.

Lots of people look to balance debt across cards in order to keep utilization at reasoables levels. But I'm wondering how much that matters to an individual company if you just bury the amount on their card completely....I mean you also might be a good candidate for a CLI in that case (especially for a company like Amex). But a 0% balance transfer is what I'm looking at and I'm not really interested in getting yet another card and probably couldn't get one any way at this point...maybe after I spend the money on reducing credit card debt.

jeffery581 · ‎05-07-2016

RE: But I'm wondering how much that matters to an individual company if you just bury the amount on their card completely

Depends on the bank. In my experience Capital One does not seam to mind

You could always call each bank and ask if you are eligible for a 0% BT and or CLI for utilization purposes. Couldn't hurt I wouldn't think.

Sevenfeet · ‎05-07-2016

@jeffery581 wrote:
RE: But I'm wondering how much that matters to an individual company if you just bury the amount on their card completely

Depends on the bank. In my experience Capital One does not seam to mind

You could always call each bank and ask if you are eligible for a 0% BT and or CLI for utilization purposes. Couldn't hurt I wouldn't think.

I actually called the three of them already with my 'what-if" scenario. None could make a committment that I would be eligible for a balance transfer before I actually paid the card down.

jeffery581 · ‎05-07-2016

I would go with the first reply then. Slow and steady wins the race. I know paying interest sucks but you'll get them paid in time. Maybe see if you can get an apr reduction is the last thing I can think of. Atleast you had them and they were usefull to you and your family.

sr383 · ‎05-07-2016

I got the balance transfer offer pretty frequently with scores and utilization very similar to yours. Discover offered 0% for 12 months with a 3% BT fee through the end of the month. Maybe it's worth giving them a call.

I could have sworn I'd recently got something similar from US Bank, but I probably shredded it. (I hate balance transfer fees.)

I ended up getting a SoFi loan. It was just a lot easier to address everything at once.

Anonymous · ‎05-07-2016

@Sevenfeet wrote:
... but the Fidelity Amex is also an intersting target since it will be managed by Citi in a few months and a clear card there might be a business opportunity in their eyes.

Actually, it's going to be Elan which is related to US Bank, not Citi. (It's Amex's Costco that is going to Citi).

Sevenfeet · ‎05-07-2016

@Anonymous wrote:
@Sevenfeet wrote:
... but the Fidelity Amex is also an intersting target since it will be managed by Citi in a few months and a clear card there might be a business opportunity in their eyes.

Actually, it's going to be Elan which is related to US Bank, not Citi. (It's Amex's Costco that is going to Citi).

Correct. My mistake.