I got an offer from BoA to transfer my other credit cards' balances to my Cash Rewards card for 12 mos at 0% interest. I'd like to do it and save myself a bunch of money on interest, but I'm concerned about how this will affect my score. I know creditors frown on carrying a balance and having a sudden increase in debt on one credit card, but this would zero out four other cards. My Cash Rewards card would end up carrying 40% utilization for a few months. Anybody have an idea of what I could expect to happen with my score if I pull the trigger on this?
Starting Score: TU: 566
The money saved on interest should be more important to you than the effect on your score. Especially if you aren't trying to apply for something else right now. The only way I would worry about what this would do to my score would be if you were going to do something that would tank your score so much that you would risk adverse action from other lenders. But I doubt that carrying 40% utilization on one card is going to freak your lenders out.
That said, it's going to be a crapshoot predicting how it will affect your score, but we'd need more info to do so. What is your total utilization right now. You might even see an increase by having only one card report a balance instead of four cards reporting. Especially if some of the other cards are closer to their CLs.
@Walt_K wrote:The money saved on interest should be more important to you than the effect on your score. Especially if you aren't trying to apply for something else right now. The only way I would worry about what this would do to my score would be if you were going to do something that would tank your score so much that you would risk adverse action from other lenders. But I doubt that carrying 40% utilization on one card is going to freak your lenders out.
That said, it's going to be a crapshoot predicting how it will affect your score, but we'd need more info to do so. What is your total utilization right now. You might even see an increase by having only one card report a balance instead of four cards reporting. Especially if some of the other cards are closer to their CLs.
I currently have 11% utl across all my cards. I guess it would be a good idea to avoid the interest charges. Thanks for your help.
Yes. I say go for it.
@lithium78 wrote:I got an offer from BoA to transfer my other credit cards' balances to my Cash Rewards card for 12 mos at 0% interest. I'd like to do it and save myself a bunch of money on interest, but I'm concerned about how this will affect my score. I know creditors frown on carrying a balance and having a sudden increase in debt on one credit card, but this would zero out four other cards. My Cash Rewards card would end up carrying 40% utilization for a few months. Anybody have an idea of what I could expect to happen with my score if I pull the trigger on this?
Do realize that the BT fee winds up being the equivalent of an APR. Since you have a 12 month offer, whatever your BT fee is will sorta-kinda be your APR. So a 4% BTR fee is like paying 4% APR.
And that's great, it's certainly better than paying a lot more on multiple cards, but you do need to be aware of it. The BT fee is added to the amount that you transfer, so if you transfer over $10K, a 4% BT will make the transferred amount $10,400.
If they only gave you a 6-month offer, that 4% BT fee would be the equivalent of 8% APR. If it were a 24-month offer (never heard of one from BofA), it would be the rough equivalent of a 2% APR.
eta: Note: yes, it's not an exact equivalent, which I tried to point out. Put your calculators away, everyone. 
@haulingthescoreup wrote:
@lithium78 wrote:I got an offer from BoA to transfer my other credit cards' balances to my Cash Rewards card for 12 mos at 0% interest. I'd like to do it and save myself a bunch of money on interest, but I'm concerned about how this will affect my score. I know creditors frown on carrying a balance and having a sudden increase in debt on one credit card, but this would zero out four other cards. My Cash Rewards card would end up carrying 40% utilization for a few months. Anybody have an idea of what I could expect to happen with my score if I pull the trigger on this?
Do realize that the BT fee winds up being the equivalent of an APR. Since you have a 12 month offer, whatever your BT fee is will sorta-kinda be your APR. So a 4% BTR fee is like paying 4% APR.
And that's great, it's certainly better than paying a lot more on multiple cards, but you do need to be aware of it. The BT fee is added to the amount that you transfer, so if you transfer over $10K, a 4% BT will make the transferred amount $10,400.
If they only gave you a 6-month offer, that 4% BT fee would be the equivalent of 8% APR. If it were a 24-month offer (never heard of one from BofA), it would be the rough equivalent of a 2% APR.
eta: Note: yes, it's not an exact equivalent, which I tried to point out. Put your calculators away, everyone.
Good points. I wasn't even thinking about the BT fee. You always have to look at that and see if it is worth your while. I was figuring it was a no fee 0% transfer offer.
As for the effective APR of the BT fee, I usually think of it in terms of the payoff time rather than the length of the offer. In other words, your 24 month 0% offer doesn't mean much if you're planning to pay the balance off in 3 months. With short payoff times, you really have to look to see if the BT offer is worth it when there is a fee involved. Of course you can make it more complicated by assuming that you'd put the money into a savings account or CD over the course of the 2 years (or whatever the length of the offer is) rather than pay the card off, but interest rates aren't that great right now in case you hadn't noticed. 
@Walt_K wrote:
Good points. I wasn't even thinking about the BT fee. You always have to look at that and see if it is worth your while. I was figuring it was a no fee 0% transfer offer.
As for the effective APR of the BT fee, I usually think of it in terms of the payoff time rather than the length of the offer. In other words, your 24 month 0% offer doesn't mean much if you're planning to pay the balance off in 3 months. With short payoff times, you really have to look to see if the BT offer is worth it when there is a fee involved. Of course you can make it more complicated by assuming that you'd put the money into a savings account or CD over the course of the 2 years (or whatever the length of the offer is) rather than pay the card off, but interest rates aren't that great right now in case you hadn't noticed.
Excellent point! Since I usually freak out and pay the things off early, that definitely applies to my BT's.
@haulingthescoreup wrote:Excellent point! Since I usually freak out and pay the things off early, that definitely applies to my BT's.
Lol@ freaking out and paying things early. That's EXACTLY what I do!
Starting Score: 648