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03-20-2017 08:47 AM
Hey all. I just got a balance transfer card to put some of my student loan on it. When I went to school I got a private loan at a very high interest rate, so I just got a balance transfer card with 18 months no interest in order to drive down my principle balance on my student loan. I am also trying to boost my credit score, or at least maintain it somewhere around where it's at right now while trying to save on interest. I understand carrying even a balance on a Balance Transfer card will negatively impact my score via the metric of utilization, I'm simply looking for ways to mitigate this issue while maximizing my balance transfer opportunity while still using my other two credit cards to keep the accounts active. So should I only put, say, 25% of my credit limit (specific to my card which offers Balance Transfer). What percent of my total credit limit should I be careful of? I try to keep them all below 9%, but I understand with what I'm trying to do, I'll be outside of that. Thanks!
03-20-2017 11:49 AM - edited 03-20-2017 11:52 AM
25% of that specific card's limits should be good.
Based on what I've read here, less than 30% (28.9% or below) is a number that's considered to be responsible, but you should probably be OK if you're a bit above that threshold on a single card.
Being below 9% is going to be better for your score than being below 29%. But you're doing what makes financial sense. The minor score cost will be worth it from a pocketbook standpoint.
To put a dent in that balance, be sure to make payments that the new card company considers to be "subtantially" above the minimum. I'd take the total balance and divide it into 15 or 16 payments, just to be on the safe side.
03-20-2017 12:04 PM
Thanks for replying!
I was thinking 25% would be a good number. And I hadn't considered minimum payments, for some reason I considered Balance Transfers to work a bit differently than a normal balance and didn't think about minimums.
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