@baller4life wrote:
@Ghoshida wrote:
I'm not sure about the "banks want you to do BT" line.
It's the same thing as "banks want you to use all of your credit line" idea.
The fact that banks extend you a BT offer doesn't immediately mean they will be happy to see you use all of it.
Look at it from the bank's perspective. Suppose you have a $10k CL. The bank is ok if you use a part of it all the time. It's also happy if you don't pay in full and pay some interest. However, in most cases, it won't like you if you are using all of the credit line all of the time. That is why some customers see adverse action after carrying a huge credit card debt for an extended period of time.
Now BTs by design are meant for an extended period of time, generally 12 months or more. Banks make money from the fee, and then hope that you are going to over shoot the 0% period.
Generally, these offers come from a team different than the underwriting / risk team. I get Citi BT offers that have my CL from 3 months ago. Often, this is a revenue generating tact. I mostly get BT mails on cards that I use the least.
The revenue team is busy trying to make some money and hoping that the customer is still solvent. But the risk logic is still the same. I can technically use all of my $10k CL for the BT. However, I will be seen as carrying debt for an extended period of time. Therefore, either I don't max out on the CL or I pay off much earlier than the max BT offer period.
Often, customers commit both mistakes and then banks take adverse action.Oh I wasn't addressing the OP when I made that comment. I was responding to a different poster who was afraid their bank would "hate them" if they used their bt offer at all. I am in total disagreement with the OP maxing out his cards for an investment!
Ha ha, now I don't know why I felt I had to lecture and all that 
Anyways, yes, I have also used BTs before (Citibank 0% offers for e.g.). The only thing I disliked was how they'd charge interest on new purchases even when you pay them as soon as they post. The reason given is that when charges post, it's about 1-3 days after the transaction has happened, and that full purchase APR applies without any grace period for the 3 days or so. Now that should be a few pennies but most banks have a min interest rule. Therefore they'll charge you $0.50 - $2 in interest, depending on their policy. Citi did waive that off for me after I wrote to them but it still felt like an inconvenience.
It seems like Barclays (and possible Cap One now) has done away with the policy of charging new purchases the full APR without any grace period once the BT offer is accepted. They treat the BT as it is meant to be and provide regular grace periods to new purchases, but all new purchases must be paid in full before the due date, along with a certain percentage of the BT.
@Anonymous wrote:
Hi, I was wondering what would happen if I were to simultaneously accept all my balance transfer offers at once? I currently have good 0% offers on literally all of my credit cards for a year. If I were to take them all, I could have well over 100k in cash that I could use to invest during that year. However, of course, this would max my cards, and my score would drop significantly. Is there some reason not to do this? Will my credit card issuers all freak out and close my accounts etc? It seems like such an excellent opportunity to take the cheap money for the year, but I've never done anything like that so I'm not sure what would happen. Thanks.
You would be paying a lot of fees, and your credit rating would be destroyed, and at least some of your cards will have credit limits reduced, and some might get closed.
I can guarantee that you would regret it, if you pulled anything like that.
If you think you know better than the banks what to do with their money, you're wrong.
If you put it in bank accounts the interest will be negligible, and if you put it in stocks or bonds you might lose the money and then be in over your head for paying it back.
Would be a catastrophic thing for you to do.
Don't even think about it.
@Anonymous wrote:
It's only 3 cards-- all from different banks. I do have some other cards like retail cards that would remain open and unused. But those 3 have a combined limit of 130k, and then I have another one with like 10k on it that I wouldn't use for balance transfer. So if I took, say, 120k out of the 130, and left 20k in bank card credit unused, plus around 50k in unused store credit, would everything still come crashing down?
Which 3 banks?
My experience was, I did just that, took many low APR BT offers, since they were handed out like candy during the build up of the Credit Bubble. I'd usually try to get on the lowest, Forever offers if possible, and for those, never less than 90% utilization. At the peak I had $116k of open balances on card credit lines of $140k or so.
After the bubble popped in 2008-2009, Citi, BofA, and Chase began to systematically balance chase me, varying types of changing terms and closing cards ensued. I just continued to pay according to terms, even accelerated terms of 5% per month on one of the Chase cards. Capital One did no change in terms, no balance chasing.
These days, depending on the bank and the amounts involved, I'd expect a fairly swift set of AA to result from this comprehensive of a plan to BT / Draw virtually everything from the cards. The first to act will be AMEX, Barclays, likely US Bank, perhaps Chase, and from there, it gets a little fuzzy in predicting specific AA. There was another poster who was updating in the "Understanding FICO Scoring" forum, documenting his direct experience with taking all his cards to max utilization.
It is possible to get the $100k off your cards, but as noted by others, you will pay between 3% and 4%, so figure at least $3k in immediate fees. If the "sure thing" investment you put the $97k into has issues, any losses, well, you know who pays for those out of other cashflow.
You will be balance chased by some bank. I don't think that is in doubt. But the thing about balance chase, CLD, you already have the funds out. So you just have to decide whether you are going to put up with it, not be spooked by the bank, and pay according to terms, hold your funds to invest and hope for a good return on the investment.
I will say that 99% of the people who post here about getting AA, about getting CLD, panic the first day they realize it happened, and want to pay down the balance to zero. That is an option, but then you've just paid $3,000 to see whether you can poke the bear with a Tazer, and see what happens.
If you go forward with this, then know you will have that stressful decision when the CLD start, and they will start, to decide whether you gut it out, or fold like a paper bag. Nothing wrong with folding, although it is expensive in this scenario.
Good luck!
