Helping family pay off bills with 0% APY

[Creditaddict]

Do you have Chase Slate currently? I would look at that card with no BT fee and 15 months 0% vs. your discover 3% fee.

I'm all for the "when is helping hurting" suze orman and don't lend money to friends, family, partners, etc. but my partner has co-signed and such for me and we are still together and my crazy credit antics has now paid off and I have done all that I said I would with credit and refinancing, etc. it's tough but if you understand why they need your help and know the credit of why you can't help them obtain the credit to help themselves? with 0% then maybe you can step in.

what credit are they needing to BT to you? can they not obtain any better options on own? have you tried things like prosper.com where you can not only check rate with just a sp but get a fico score at same time to see how bad things are if not approved??

[Anonymous]

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@Creditaddict wrote:

Do you have Chase Slate currently? I would look at that card with no BT fee and 15 months 0% vs. your discover 3% fee.

I'm all for the "when is helping hurting" suze orman and don't lend money to friends, family, partners, etc. but my partner has co-signed and such for me and we are still together and my crazy credit antics has now paid off and I have done all that I said I would with credit and refinancing, etc. it's tough but if you understand why they need your help and know the credit of why you can't help them obtain the credit to help themselves? with 0% then maybe you can step in.

what credit are they needing to BT to you? can they not obtain any better options on own? have you tried things like prosper.com where you can not only check rate with just a sp but get a fico score at same time to see how bad things are if not approved??

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The thing is, if he were to help them get their own credit option, it would be best for THEM,  However, if the OP trusts the loan repayment would be solid, HIS CREDIT will benefit LOTS from this BT and I think he could use the help, as well.  With the right people, it's a win-win.  The only crucial piece of info is for the OP to know "it's the right people."  If so, do it like yesterday!

[yfan]

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@JoshNurse wrote:

Will this affect my credit and will it recover after everything is paid in 1 year?

I want to help my familly that has $9500 in debt by doing a balance transfer to my Discover IT card.  My credit limit is $10,000 so I will be at 99% usage.

It will be 0% APY for 1 year and they want to pay it off in exactly on year or one month less.  Will this hurt my credit and can it improve once its all paid for?

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The answers to all of your questions, as others have said, is yes - but with a caveat. The caveat is that Discover doesn't decide to balance chase you. It's entirely possible that when they see you put all that credit on, they will decide to reduce your credit line as the balance is being paid off. This WILL hurt your credit in the long run - you will have less available credit, and therefore your utilization, even after the balance is paid off, would be higher than it would be.

It's very noble to try to help your family. But the truth is that you are taking on about $9800 in obligations which even you seem to admit you cannot pay down in one lump sum (if you could, you should loan them the cash instead of balance-transferring). So what happens if all of a sudden you lose your income and can't pay either that balance or other balances? What happens if their financial plans don't pan out over the next year? You're pushing the envelope a little too far IMO. Not because you shouldn't trust your family, but because things can happen that can screw up these plans that you have no control over.

[Anonymous]

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@yfan wrote:

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@JoshNurse wrote:

Will this affect my credit and will it recover after everything is paid in 1 year?

I want to help my familly that has $9500 in debt by doing a balance transfer to my Discover IT card.  My credit limit is $10,000 so I will be at 99% usage.

It will be 0% APY for 1 year and they want to pay it off in exactly on year or one month less.  Will this hurt my credit and can it improve once its all paid for?

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The answers to all of your questions, as others have said, is yes - but with a caveat. The caveat is that Discover doesn't decide to balance chase you. It's entirely possible that when they see you put all that credit on, they will decide to reduce your credit line as the balance is being paid off. This WILL hurt your credit in the long run - you will have less available credit, and therefore your utilization, even after the balance is paid off, would be higher than it would be.

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You, gratuitously, jumped to Discover balance chasing him, based on NOTHING.  Why would they do that?  There are specific circumstances that lead to balance chasing, and he follows my-pro-loan advice he would have no such problem.

[yfan]

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@Anonymous wrote:

You, gratuitously, jumped to Discover balance chasing him, based on NOTHING.  Why would they do that?  There are specific circumstances that lead to balance chasing, and he follows my-pro-loan advice he would have no such problem.

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What is "my-pro-loan"? And frankly, unless you're the CEO of Discover, you cannot guarantee that they won't balance chase him. Why? Because the balance is too high. Or because whatever - they don't even have to give a reason. There is no legal obligation for Discover to maintain a credit limit. It may be unlikely, but it isn't impossible. Whether OP is worried about it - or whether you are - is a different question than whether it is theoretically possible.

Look. Discover is one of my two favorite issuers. I like them. But at the end of the day, they are a credit card company. I am not going to say they are not going to do such and such just because they're Discover and are nice guys.

[Creditaddict]

Balance chasing is so 2009... Simmer down everyone... it happens but they are going to be looking at overall credit profile... banks don't usually credit chase because you maxed out JUST their card and are paying it down on a 0% offer... they usually Balance chase because you increased OVERALL credit utilization on all of your accounts!

if OP has room elsewhere and takes a spike from discover but is paying it on a 12 months schedule they are not going to do anything! they will start CLI I bet the bank!

[yfan]

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@Creditaddict wrote:

Balance chasing is so 2009... Simmer down everyone... it happens but they are going to be looking at overall credit profile... banks don't usually credit chase because you maxed out JUST their card and are paying it down on a 0% offer... they usually Balance chase because you increased OVERALL credit utilization on all of your accounts!

if OP has room elsewhere and takes a spike from discover but is paying it on a 12 months schedule they are not going to do anything! they will start CLI I bet the bank!

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That's another possibility, and may even be a more likely one given OP's credit profile. I am just giving a possiblity, however, unlikely, to consider.

[Anonymous]

I wouldn't do it

[Anonymous]

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@Anonymous wrote:

I wouldn't do it

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Yes, but, JoshNurse is a hell of a guy.

[efranklin23]

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@Anonymous wrote:

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@Anonymous wrote:

I wouldn't do it

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Yes, but, JoshNurse is a hell of a guy.

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He may be a good guy but you never know how a person is when they know you're likely to lend them money like that. people can easily change when they see you're willing to give them a break on payment. While I agree some people are good on the word to make the payments within a year, It can ruin your relationship with your family which may not be worth it in the long run. So be careful on this decision. 

Credit is a great thing on your end and one thing you don't want to do is ruin it as it may take years to recover (speaking from experience).