@Anonymous wrote:
Hi all. I just was approved for a $2,000 Amex BCE. I would like to BT $1k to the new Amex..
Is this something that would spoke amex or lead to a possible AA? I have 12 months 0% on BT with this new card. From what I gather Amex is not always a big fan of balance transfers. I will be able to pay off the balance within 3 months.
Do not rely on memes like "AmEx hates balances".
Revolving utilization and all the other FICO scoring factors all matter to all creditors that use a FICO as well as the creditor/product's underwriting criteria.
http://www.myfico.com/crediteducation/whatsinyourscore.aspx
$1,000 / $2,000 is 50%. General advice is do not exceed 30% revolving utilization.
However, short term high utilization generally isn't an issue. It's prolonged high utilization that can lead to adverse action. Assuming you're making equal payments over 3 months your revolving utilization would drop to 33% the second month and to 17% the following month. That doesn't seem like it would be an issue to me but your other accounts and your credit profile matter as well. if everything else is in good shape you're probably fine. If your credit profile has some issues then you present more of a risk and 50% on an account may be a bigger deal to some of your creditors.
While revolving utilization has a significant impact it is not the only factor that matters. Your entire credit profile matters and will determine whether or not you will see AA. It is not just about the BCE itself but everything on your report. There isn't enough info in your post for us to even begin to attempt to guess.
@Anonymous wrote:
I believe it only becomes an issue with any creditor when a person is only paying the minimum while adding more charges and has a risky credit profile.
Not necesarily. It's not really the minimum that matters. The minimum only matters in that it is the least you can pay to keep an account current. It's really revolving utilization that matters in this context but, again, one's entire credit profile always matters. It is never just about one factor on its own or one account on its own.
@pip3man wrote:
man this whole fear of AMEX really irks me... u have a promotional balance transfer offer go ahead and use the damn thing lol, that's exactly what it was made for.
It's not AmEx. People fear what they don't understand. It's not just a matter of the creditor but one's credit profile. Those with strong, established profiles do not have issues with AmEx. Those with thin profiles and/or profiles with issues can see problems with any creditor.
It's not simply about "what it was made for". Having a limit of $X doesn't mean you can just go out and rack up charges of $X. Having a 0% offer doesn't mean that all of the standard considerations go out the window. It's all about how a creditor assesses risk of default for a given credit profile. Educate yourself on how credit is assessed. You won't necessarily know the exact bounds of a given creditor's risk tolerance but you can certainly have an understanding of what creditors will see as an obvious risk and what is clearly safe.
Generally, paying only the minimum is a bad idea and not advisable but with a strong enough credit profile and with revolving utilization in check, one can leverage 0% offers paying the minimum with no adverse action. However, unless you credit profile is in stellar shape I don't advise trying this. While a $2,000 limit isn't as bad as a $500 limit it still indicates to me that the creditor has some concerns about the person's credit.
