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The Balance Transfer Mystery

Regular Contributor

The Balance Transfer Mystery

Places offer 0% balance transfers but will only approve you if you have low utilization. Can somebody explain to me how one transfers a balance if they're not utilizing their cards? These 0% BT offers are sort of baffling me right now.

 

So your UT is 2%. You get approved for the most awesome card with 0% BT for 18 months because you have low util. Great.

 

Now let's say it's 52% and you're wanting a nice low rate. You seem like the perfect candidate. BEEEP...denied for high utilization.

 

 




Message 1 of 5
4 REPLIES
New Contributor

Re: The Balance Transfer Mystery

I would assume this is because banks don't necessarily want to be a life raft.

I recently took advantage of a 15 month offer. After applying and approval, I purchased a new riding mower and new dress clothes for my wife on another card, then BT to the new account. Fortunately, we could pay cash for these np, but with this method, we enjoy the rewards via the online rewards mall and the 0% for 15 months.

Message 2 of 5
Valued Contributor

Re: The Balance Transfer Mystery

I don't think it is exclusive to low utilization. I have seen plenty of examples in real life from family members with 50% or more in utilization getting approved for great BT offers. Most recently, a family member with approximately 42% (7000ish/17000ish) on a card BT'd to a Chase Slate for 0% for 15 months and then 13.99% after that. Original approval was only for $4500, but a quick recon phone call got the limit up to $8,000. This family member had NO inquiries on any report (according to them), no lates ever, only 2 credit cards (the second is a small store card, maybe $2,000 balance). FICO is likely near or above 800, even with the high utilization. 

 

As always, YMMV - but I agree with above poster. Banks try not to be a life raft, but are usually more than willing to give you a chance if there is debt involved that appears manageable. I think active credit-seeking behavior (lots of INQs and new accounts) reduces the chance of good BT offers. Unfortunately for the members of this forum, that means our behavior may not be well rewarded in the BT world. 


In My Wallet: Amex BCP (12/12) $50,000, Chase Freedom (12/12) $16,500, Cap1 Quicksilver (6/12) $14,000, Barclaycard Rewards (5/13) $10,500, Citi Prestige (4/16) $30,000

Last App: June 27, 2015
Message 3 of 5
Senior Contributor

Re: The Balance Transfer Mystery

Might also consider this:

Say you have $100,000 in total credit lines....
And your util is in line at a nice 9%.
Say you owe that 9% on a variety of store cards at 23.99%+. You have $9,000 of cc debt at a high rate, and your util is still low..
This will permit approval.
$9000 is a good amount to bt. This is why having high limits is so important! Consequently, it becomes more difficult to reduce util the more credit you have.
Marriott PR$25k | BCE $24.5K |BankAmericard Visa $25k| BOA Better Bal $17.5k |Wmt Discover $12.5k | BR Visa $17.5k | Amex Delta Gold $10k | Discover IT $10k | Paypal Extras MC $15k | Amazon Store $10k|Smile Gen $7.25k | Dillard's $10k | West Elm $4k| Express $3.05K | Mypoints.com Visa $4.5k | Freedom Visa $1k| Amex Surpass $1k
Message 4 of 5
Valued Contributor

Re: The Balance Transfer Mystery


youngandcreditwrthy wrote:
Might also consider this:

Say you have $100,000 in total credit lines....
And your util is in line at a nice 9%.
Say you owe that 9% on a variety of store cards at 23.99%+. You have $9,000 of cc debt at a high rate, and your util is still low..
This will permit approval.
$9000 is a good amount to bt. This is why having high limits is so important! Consequently, it becomes more difficult to reduce util the more credit you have.

+1 Exactly!   This is the optimum type of situation that the banks are looking at/for, and a good explanation why high limits are important. 

EX = 849 EQ = 850 TU = 850 as of 07/2017
Retired and Retiring Cards!
Message 5 of 5