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Balance transfer

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Anonymous
Not applicable

Balance transfer

I am thinking of doing a balance transfer. My questions are will this affect my fico score? The card I would like to transfer the balance from has a much higher limit than the card I would like to transfer the balance to, what if problems would this cause on my Fico score?
Message 1 of 16
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oracles
Valued Contributor

Re: Balance transfer

Hi biggiet and welcome to the forums.

 

First you need to ask what is more important, saving money or your fico score.

 

If it is saving money than definitely do the  BT. I am assuming the card you are going to use has a lower apr than the card it is on now. Your scores will rebound and you will have saved money.

 

in today's times, to me, saving money is more important. But to each its own. You maybe trying to get a house.

 

If that is the case, and scores are more important, you will experience a decrease in score due to individual util% of the card increasing. You need to tell us the limit on the card it is on now and the limit of the card it will be on.

 

Maybe you can ask for cli on other cards to try to offset the increase in util% for that particular card. This will decrease overall util% on all cards therefore giving you back points.

 

Hope this helps

Message 2 of 16
15 REPLIES 15
oracles
Valued Contributor

Re: Balance transfer

Hi biggiet and welcome to the forums.

 

First you need to ask what is more important, saving money or your fico score.

 

If it is saving money than definitely do the  BT. I am assuming the card you are going to use has a lower apr than the card it is on now. Your scores will rebound and you will have saved money.

 

in today's times, to me, saving money is more important. But to each its own. You maybe trying to get a house.

 

If that is the case, and scores are more important, you will experience a decrease in score due to individual util% of the card increasing. You need to tell us the limit on the card it is on now and the limit of the card it will be on.

 

Maybe you can ask for cli on other cards to try to offset the increase in util% for that particular card. This will decrease overall util% on all cards therefore giving you back points.

 

Hope this helps

Message 2 of 16
Anonymous
Not applicable

Re: Balance transfer

The limit on one card is 28,000 whereas the other is only 8500. I think having a better fico score is more important to me. It took me a long time to get where I am from having no credit as a teenager to having excellent credit now.

Message 3 of 16
RobertEG
Legendary Contributor

Re: Balance transfer

In making this decision, you will get a lot of opinions. 

I only offer this simple advice.

Unless you are thinking of applying for new credit in the near future, then **bleep** the FICO impact and go with the financial $$$ benefit.  FICO scores dont mean diddly until you are actually applying for new credit.  They are like the waning moon, reset by the new day of dawn. 

Message 4 of 16
Anonymous
Not applicable

Re: Balance transfer


@RobertEG wrote:

In making this decision, you will get a lot of opinions. 

I only offer this simple advice.

Unless you are thinking of applying for new credit in the near future, then **bleep** the FICO impact and go with the financial $$$ benefit.  FICO scores dont mean diddly until you are actually applying for new credit.  They are like the waning moon, reset by the new day of dawn. 


I'm dittoing!  I did a lot of BT's when I was getting rid of my credit card debt, and I didn't care about the effect on my FICO scores, granted I also did a lot of the BT'ing before I started checking my credit, but at the time scores weren't important, getting rid of my debt and saving money was.  I am going to be going for a mortgage this year and now my score is starting to be more important to get me a better interest rate.  

 

But if you're not applying for credit, the effect on your FICO score will only be as long as your card has high util.  Scores bounce back very quickly when the util gets better.

Message 5 of 16
cobaltnv
Established Contributor

Re: Balance transfer

I agree with all that has been said here. A little more info might help provide a more complete picture from which you can make your decision. What are the limits, balances, and interest rates on your credit cards? How large is the balance you are thinking of transferring? Are you planning any major purchase in the next few years? What are the terms of the BT? What are your current Fico scores?

 

Sorry for the barrage of questions, but these are the thing that will help get you the best/most complete advice.

Cheers

TU 810: EQ 813: EX 814 (9/16/09--Loan officer pull)

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Message 6 of 16
Anonymous
Not applicable

Re: Balance transfer - New impact for 2010??

Looks like this thread is a year old so I thought I'd ask.

 

I seem to recall hearing something about Balance Transfers (a.k.a. the loan shell game) impacts your
FICO neg. this year (2010).

 

I have an amount on a card, opened exclusively for a major home appliance, that comes due in May 2010.

Its' terms were/are 0% interest for 1 year, No payments for 1 year.

Of course if I don't pay it in full at the end of that year (5/2010) then then all interest applies. OK, fine I can do that.

Now I get a credit card offer in the mail, from the same C.C. company offering 0% on all balance transfers till 01/01/2011

if they are postedby 4/1/2010. Obviously I'll have to make payments though.

It's like the stars are in perfect aligmnent here, to the point I'm checking everything twice so as not to get burned.

Will doing the transfer impact my score as I've heard?.

 

 

Message 7 of 16
llecs
Moderator Emeritus

Re: Balance transfer - New impact for 2010??


MostCurious wrote:

Looks like this thread is a year old so I thought I'd ask.

 

I seem to recall hearing something about Balance Transfers (a.k.a. the loan shell game) impacts your
FICO neg. this year (2010).

 

I have an amount on a card, opened exclusively for a major home appliance, that comes due in May 2010.

Its' terms were/are 0% interest for 1 year, No payments for 1 year.

Of course if I don't pay it in full at the end of that year (5/2010) then then all interest applies. OK, fine I can do that.

Now I get a credit card offer in the mail, from the same C.C. company offering 0% on all balance transfers till 01/01/2011

if they are postedby 4/1/2010. Obviously I'll have to make payments though.

It's like the stars are in perfect aligmnent here, to the point I'm checking everything twice so as not to get burned.

Will doing the transfer impact my score as I've heard?.

 

 


BTs alone have no impact on your FICO score. Now, as it has always been, if you open a new CC to do the balance transfer, you will see a score hit due to the inquiry, the new credit, and the impact to your average age. Any damage is somewhat minimal (I've lost an avg. of 20-25 pts for each new CC reporting) and you'd usually regain most, if not all, of the points within a year.

Message 8 of 16
Jazzzy
Valued Contributor

Re: Balance transfer - New impact for 2010??


@Anonymous wrote:

Looks like this thread is a year old so I thought I'd ask.

 

I seem to recall hearing something about Balance Transfers (a.k.a. the loan shell game) impacts your
FICO neg. this year (2010).

 

I have an amount on a card, opened exclusively for a major home appliance, that comes due in May 2010.

Its' terms were/are 0% interest for 1 year, No payments for 1 year.

Of course if I don't pay it in full at the end of that year (5/2010) then then all interest applies. OK, fine I can do that.

Now I get a credit card offer in the mail, from the same C.C. company offering 0% on all balance transfers till 01/01/2011

if they are postedby 4/1/2010. Obviously I'll have to make payments though.

It's like the stars are in perfect aligmnent here, to the point I'm checking everything twice so as not to get burned.

Will doing the transfer impact my score as I've heard?.

 


As said above, you will have a ding for an inquiry and for a new account. It will also lower your Average Age of Accounts (AAoA).

 

All that may still be worth it for you.

 

That said, what is your total utilization percentage? I ask, because my caution would be that you not tempt adverse action (AA) from your other credit card companies. We've seen credit lines lowered and accounts closed as a result of red flags picked up by keeping utilization too high or by maxing a credit card. I don't know if a BT could trigger AA, but it's something to consider.

Message 9 of 16
Anonymous
Not applicable

Re: Balance transfer - New impact for 2010??

Thanks for the perspective IIecs and Lynette, good food for thought.

 

With that thought, I've decided to pay the 1st C.C.(0%/NoPay for 1yr @ 69Util/10k & possible retro-19.5%) off instead of transfering its' single-use balance to a new 0%. I have enough C.C.'s, most not used, and the main reason I went with this offered method was to get what I wanted, keep my money close, and ride out UnEnjoyment all while using their money free, for a year. That goal was met, I can now part with the money that I didn't want to a year ago.

Plus with the 3% xfer fee they'd get a return > the principle owed, which defeats my goal of using their money for free.

I might be in the market for a house in a year as well and with this CC and an another one opened last year I think it's best to spread the usage of them around, paying ea. in full, rather then decreasing my AAoA again.

 

Thanks again, very helpful!

 

 

 

 

Message 10 of 16
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