Credit Cards

[robinallison]

Hi ~ I'm considering transferring my balances around to save on interest.  One card i want to transfer to has a limit of $8,500.00 ~ and I have used $5,786.00 of that.  This card is offering 0% transfer ~ If I transfer $1,549.00 to this card, whcih would put the total at $7,335.00 ~ will this affect my FICO score and bring it down?  Thanks!

[GregB]

Every balance transfer I have seen always allocates any payments to the highest interest rate balance first. So you will pay a transfer fee and you will pay your normal interest on your 5,786 until it is completely paid. By that time the 0% offer will surely be over so you will pay the normal interest on that also AND the transfer fee.

If you want to actually benefit from the 0% Balance Transfer Offer, you should pay off the $5,786 first. Then do the balance transfer after considering what the real interest will be with the transfer fee and any interest that you will pay. Don't forget to find out if they have a "minimum interest charge" or if you will pay the normal interest on the transfer fee amount.

Don't forget to STOP USING THAT CARD or any new charges will get charged the normal interest rate until the very end.

Message Edited by GregB on 04-02-2009 11:37 AM

[VEEnVEGAS]

You do realize that if you do a BT onto a cc that already has a balance that you will be paying off the amount with the lowest APR first, right? That means that you will be paying interest on the entire  $5786 balance until the 0% balance is paid off.

Is the interest on the account you want to transfer to a LOT lower than the account you would be transferring from? 

[VEEnVEGAS]

You type LOTS faster than I do Greg! Plus I stopped to help my SO find his keys!

[moondog7324]

You are going to be at 91% utilization on that card- I see a drop in FICO. I'm a believer in managing your debt- not your score. So do what you believe is fiscally responsible to get you out of that debt.

[robinallison]

Yes, I think it's a lot lower ~ from 17.24% to 9.24% ~ what do you think?  Also, will this lower my credit score if I have a higher balance on the card I transfer to?  Thanks so much for your response! 

[Locksley123]

I just want to correct the first poster that all payments are applied to the lowest APR first, not the highest. Pretty sure that what you meant