topic Re: Balance transfer more than I owe - what issues? in Credit Cards

Balance transfer more than I owe - what issues?

frugal47374 — Thu, 08 Jul 2021 14:57:01 GMT

I have a new NFCU card offering $0 fee, 0% for 15 months balance transfers (for the next 30 days).

What happens if I do a balance transfer of more than I owe on the other card?

If, for instance, there were absolutely no repercussions, it would seem to make sense to transfer the amount of my credit limit to a card offering 2% bonus on purchases, in effect giving that 2% card an additional 0% for 15 month bonus.

But since I'm surely not the first person to think of this, it seems that something makes this strategy impossible or risky.

Re: Balance transfer more than I owe - what issues?

pizzadude — Thu, 08 Jul 2021 18:52:33 GMT

@frugal47374 wrote:
I have a new NFCU card offering $0 fee, 0% for 15 months balance transfers (for the next 30 days).

What happens if I do a balance transfer of more than I owe on the other card?

If, for instance, there were absolutely no repercussions, it would seem to make sense to transfer the amount of my credit limit to a card offering 2% bonus on purchases, in effect giving that 2% card an additional 0% for 15 month bonus.

But since I'm surely not the first person to think of this, it seems that something makes this strategy impossible or risky.

I think this depends on what the other CC would do with a check that's greater than the balance; they might take it and leave a credit balance on your account but I suspect at some point they'd mail you a check for the difference if you have a rolling credit balance for a few statements so I'm not sure you'd achieve your desired results this way.

Re: Balance transfer more than I owe - what issues?

SweetCreditObsession — Thu, 08 Jul 2021 19:26:59 GMT

I agree that this does seem risky. Please let us know how you proceed.

Re: Balance transfer more than I owe - what issues?

Anonymous — Thu, 08 Jul 2021 19:52:05 GMT

@pizzadude wrote:
@frugal47374 wrote:
I have a new NFCU card offering $0 fee, 0% for 15 months balance transfers (for the next 30 days).

What happens if I do a balance transfer of more than I owe on the other card?

If, for instance, there were absolutely no repercussions, it would seem to make sense to transfer the amount of my credit limit to a card offering 2% bonus on purchases, in effect giving that 2% card an additional 0% for 15 month bonus.

But since I'm surely not the first person to think of this, it seems that something makes this strategy impossible or risky.
I think this depends on what the other CC would do with a check that's greater than the balance; they might take it and leave a credit balance on your account but I suspect at some point they'd mail you a check for the difference if you have a rolling credit balance for a few statements so I'm not sure you'd achieve your desired results this way.

I imagine this is what would happen. After a certain period of time the bank issuing the card you transferred the balance to would likely send a check for the creditamount on the card.

If NFCU allows BTs as a check or direct deposit to your bank account you could always put that money into an account that you will only use to pay off that 2% card. This would essentially achieve the same thing as transferring an excess to your CC but would require a little more oversight on your part.

Re: Balance transfer more than I owe - what issues?

SoCalGardener — Thu, 08 Jul 2021 20:57:09 GMT

I agree with everyone else. Speaking from my own recent experience, after a refund was applied to one of my Mastercards, it gave me a negative balance. I didn't even do anything, like request it, and they cut a check and sent it to me within a few days. So I don't think there's anything to gain with your plan/idea.

Of course, every issuer has different rules, so checking with the specific card companies ahead of time might be a good idea.

Re: Balance transfer more than I owe - what issues?

frugal47374 — Thu, 08 Jul 2021 22:22:51 GMT

I don't think I've been clear what my goal is.

My ultimate goal is to borrow as much money at 0% interest as possible.

Since NFCU doesn't allow the balance transfer to be directly to me, my method is to transfer the 0% money to credit cards and then I could spend that as I choose.

If the recipient of the balance transfer sent me a check for the credit balance, that's fine. That accomplishes my goal of borrowing at 0%, just with some extra steps.

So far I've done balance transfers rounding up to nearest $100. I'm just wondering if I did more if anyone would complain. Nearest $1000? Nearest $5000?

It sounds like no one here has had experience doing that so I'll give this some thought....

Re: Balance transfer more than I owe - what issues?

gdale6 — Thu, 08 Jul 2021 22:32:10 GMT

I have done this. I moved 5K from a commerical bank to my CU credit card that has no cash advance fees. As soon as the -5K registered in the account I just transferred the full amount to my CU checking account. I have done this several times without so much as a question. The banks are not going to let a large negative balance sit for too long, per banking laws they have to refunded it if a credit balance remains after 3 statement cuts but as I said large negatives get checks issued pretty quick.

Re: Balance transfer more than I owe - what issues?

Loquat — Thu, 08 Jul 2021 22:38:51 GMT

@frugal47374 wrote:
I have a new NFCU card offering $0 fee, 0% for 15 months balance transfers (for the next 30 days).

What happens if I do a balance transfer of more than I owe on the other card?

If, for instance, there were absolutely no repercussions, it would seem to make sense to transfer the amount of my credit limit to a card offering 2% bonus on purchases, in effect giving that 2% card an additional 0% for 15 month bonus.

But since I'm surely not the first person to think of this, it seems that something makes this strategy impossible or risky.

I would think the more important question would be if it's a good idea to max out a new card regardless of the goal you're trying to achieve. I would tread lightly with a new card and proceed with a bit of caution.

Re: Balance transfer more than I owe - what issues?

Anonymous — Fri, 09 Jul 2021 00:12:11 GMT

You can always just deposit it directly to your account. Call your bank and get their deposit mailing address and put your checking account number as the account number for the BT and put in the deposit mailing address. Money shows up in a week or so.

Re: Balance transfer more than I owe - what issues?

frugal47374 — Fri, 09 Jul 2021 00:49:13 GMT

@Anonymous wrote:
You can always just deposit it directly to your account. Call your bank and get their deposit mailing address and put your checking account number as the account number for the BT and put in the deposit mailing address. Money shows up in a week or so.

Thanks for pointing that out. I've never heard of that but I found some old discussions of this on the Internet.

First time for me makes it a little scary ... but I may try that.

Re: Balance transfer more than I owe - what issues?

sznthescore — Fri, 09 Jul 2021 21:04:28 GMT

@frugal47374 wrote:
@Anonymous wrote:
You can always just deposit it directly to your account. Call your bank and get their deposit mailing address and put your checking account number as the account number for the BT and put in the deposit mailing address. Money shows up in a week or so.
Thanks for pointing that out. I've never heard of that but I found some old discussions of this on the Internet.

First time for me makes it a little scary ... but I may try that.

Checking Account number better start with:

3= American Express

4= Visa

5= Mastercard

6= Discover

All other numbers would be suspicious ... IMO

Re: Balance transfer more than I owe - what issues?

frugal47374 — Fri, 09 Jul 2021 21:19:17 GMT

Account number actually does start with "4". First 6 digits match to a credit union I don't have an account at. If NFCU were going to look for "suspicious", they could note the bank name I gave them didn't match the "credit" card number.

But why would they care? They are willing to let me borrow my credit limit at 0% interest for 15 months...presumably because they hope I won't pay it off then and they start collecting interest. Do they really care what I did with the money? I guess that general question goes for any balance transfer. Do credit card companies care if it really is paying off another card?

So I decided to do the test. $100 may be on the way to my bank account.

Re: Balance transfer more than I owe - what issues?

sznthescore — Fri, 09 Jul 2021 21:41:57 GMT

@frugal47374 wrote:
Account number actually does start with "4". First 6 digits match to a credit union I don't have an account at. If NFCU were going to look for "suspicious", they could note the bank name I gave them didn't match the "credit" card number.

But why would they care? They are willing to let me borrow my credit limit at 0% interest for 15 months...presumably because they hope I won't pay it off then and they start collecting interest. Do they really care what I did with the money? I guess that general question goes for any balance transfer. Do credit card companies care if it really is paying off another card?

So I decided to do the test. $100 may be on the way to my bank account.

@frugal47374 Cool beans. Let us all know how it works out. On the plus side you'll have 15 month 0% Interest on $100.

Re: Balance transfer more than I owe - what issues?

firefox100 — Fri, 09 Jul 2021 21:43:19 GMT

Yes they do care because there is higher risk when you do cash loan or cash advance to your checking account. For example if you do 10K balance transfer from credit card to another for the 10K amount your not increasing your debt, your liability say stays the same. If you deposit the money into your checking account then you will owe another 10K not paying off other credit line. Some banks make extra fees with higher cash advance fees around 5% on the amount you transfer to your checking account. They can tell by account number credit cards have 16 or 15 digits and start with 3 or 4 and 5 and 6.

Re: Balance transfer more than I owe - what issues?

Anonymous — Fri, 09 Jul 2021 23:29:38 GMT

@sznthescore wrote:
@frugal47374 wrote:
@Anonymous wrote:
You can always just deposit it directly to your account. Call your bank and get their deposit mailing address and put your checking account number as the account number for the BT and put in the deposit mailing address. Money shows up in a week or so.
Thanks for pointing that out. I've never heard of that but I found some old discussions of this on the Internet.

First time for me makes it a little scary ... but I may try that.
Checking Account number better start with:

3= American Express
4= Visa
5= Mastercard
6= Discover

All other numbers would be suspicious ... IMO

Its not suspicious. You can use a BT offer to pay other types of loans besides credit cards, literally says so at the top of the screen in the app. People have done this and had no problem with it.

Re: Balance transfer more than I owe - what issues?

Anonymous — Fri, 09 Jul 2021 23:37:10 GMT

@firefox100 wrote:
Yes they do care because there is higher risk when you do cash loan or cash advance to your checking account. For example if you do 10K balance transfer from credit card to another for the 10K amount your not increasing your debt, your liability say stays the same. If you deposit the money into your checking account then you will owe another 10K not paying off other credit line. Some banks make extra fees with higher cash advance fees around 5% on the amount you transfer to your checking account. They can tell by account number credit cards have 16 or 15 digits and start with 3 or 4 and 5 and 6.

To NFCU this will just look like you're paying off a loan other than a credit card. If someone really wants to investigate it, I guess they could call the bank and give them to account number to find out, but others have done this with no issue with NFCU and even Chase.

Re: Balance transfer more than I owe - what issues?

KatSoDak — Sat, 10 Jul 2021 02:03:54 GMT

I accidentally balance transferred to one of my CCs instead of DH's. We each have this particular card and both of them live in the sock drawer in the cool card holder I bought.

Apparently when I pulled the card to enter the numbers in the BT form I grabbed mine instead of his.

A few days later I saw that my zero utilization card had a large negative balance. Ops!

I called the receiving bank, explained my mistake and asked what options I had. Basically I could charge that amount, have a check mailed to me or have it transferred to my checking account at the same bank.

It was transferred the next day and by the following day it was on DH's card.

Re: Balance transfer more than I owe - what issues?

frugal47374 — Tue, 27 Jul 2021 20:40:44 GMT

To close the loop on this:

I have a $0 charge, 0% interest balance transfer offer. I wanted to “borrow” all the 0% money available. After paying off any credit card balances I had, my thought was to overpay some credit cards. Then my purchases would be prepaid (with 0% money) or, if they sent me a check for my credit balance, I'd still have the 0% money.

However, Anonymous pointed out there was a much simpler way. If I put in my regular account number at a bank, the money will go there just like any other deposit. I did some tests and that did work. It takes longer (around 10 days) for the money to show up since they are mailing a paper check, but this is a much simpler way to borrow at 0% for this type of balance transfer offer.