topic Re: Balance Transfer? in Credit Cards

Balance Transfer?

chelleinLV — Fri, 02 Feb 2024 20:29:10 GMT

Hello,

I am in a situation and looking for help/suggestions. I filed BK in 11/2019 and I recently found myself getting in a similar situation with maxed out cards but have luckily caught it "in time". I have cards that have $0 balance but then I have cards that are maxed out. I make enough to be good with at least the minimum payments at this time. My problem is that I tried to be smart and balance transferred a high interest credit card to a Discover card with 0% for 18 months. My 18 months runs out in June and the card is maxed. I'm worried about the much higher payment once the interest kicks in. I was thinking of a HELOC or 2nd on my house (Discover pre-approved me for a 2nd at 11% for 30 years) to consolidate all my cards but my car pays off in 3 years and I don't want to pay that for 15 or 30. My thought was about trying to find another credit card to balance transfer the Discover to so I could have time to figure everything out but not sure who else would do a 0% on a balance transfer for $8k with the BK only 4 yrs old. My credit score is lower at around 670 because of the BK and high balances but no late payments ever.

Any suggestions?

Thank you!

Michelle

Re: Balance Transfer?

SouthJamaica — Fri, 02 Feb 2024 22:40:08 GMT

@chelleinLV wrote:
Hello,

I am in a situation and looking for help/suggestions. I filed BK in 11/2019 and I recently found myself getting in a similar situation with maxed out cards but have luckily caught it "in time". I have cards that have $0 balance but then I have cards that are maxed out. I make enough to be good with at least the minimum payments at this time. My problem is that I tried to be smart and balance transferred a high interest credit card to a Discover card with 0% for 18 months. My 18 months runs out in June and the card is maxed. I'm worried about the much higher payment once the interest kicks in. I was thinking of a HELOC or 2nd on my house (Discover pre-approved me for a 2nd at 11% for 30 years) to consolidate all my cards but my car pays off in 3 years and I don't want to pay that for 15 or 30. My thought was about trying to find another credit card to balance transfer the Discover to so I could have time to figure everything out but not sure who else would do a 0% on a balance transfer for $8k with the BK only 4 yrs old. My credit score is lower at around 670 because of the BK and high balances but no late payments ever.

Any suggestions?
Thank you!
Michelle

I would suggest you join a credit union which offers a non-rewards platinum card with no balance transfer fee.

Then try to get your scores up to 700.

Then apply for the platinum card.

Re: Balance Transfer?

ptatohed — Fri, 02 Feb 2024 23:55:22 GMT

I know I am not answering your question, and I honestly am not trying to sound mean - just trying to help for the future - when you do get out of this current pickle, I really think you need to ditch the credit cards and only use debit cards/cash/check. Best of luck.

Re: Balance Transfer?

chelleinLV — Sat, 03 Feb 2024 01:18:52 GMT

Not mean at all and I 100% agree with you. I stopped using them a couple of months ago but you know, a day late and a dollar short lol

Re: Balance Transfer?

ptatohed — Sat, 03 Feb 2024 01:39:35 GMT

@chelleinLV wrote:
Not mean at all and I 100% agree with you. I stopped using them a couple of months ago but you know, a day late and a dollar short lol

Good for you Michelle,

In my opinion, the first step should always be to request an offer with your current creditor. Call Discover and explain to them your situation and see if they can extend your current 0% promo or at least move you to a low rate. It may be a long shot because you just came off an 18-month 0% offer (and your card is maxed) but it's worth a shot. They may want to work out an actual payment plan where there is a timeline for full repayment rather than just offering another 6, 12 months at 0%. Discover has a loan repayment program and I think a hardship program but I am not sure if these programs are applicable without proof of hardship or having missed some payments. Either way, my recommendation is to call Discover and see what options might be available to you. Good luck.

Re: Balance Transfer?

NoMoreE46 — Sat, 03 Feb 2024 02:04:50 GMT

Is there a way you can increase your income via another job?

Re: Balance Transfer?

firefox100 — Sat, 03 Feb 2024 02:16:46 GMT

Hi, I would take the offer from Discover on the second or take out second mortage for cash, just pay off the second as fast as you can ther should be any penalty for paying off early. using other creditcards are not answer to your problems they just make mess bigger.

Re: Balance Transfer?

youngandcreditwrthy — Sat, 03 Feb 2024 03:36:58 GMT

@chelleinLV please do not take out additional secured debt against your home.

PLEASE DO NOT TURN UNSECURED DEBT INTO SECURED DEBT!

1) what is your utilization and recent # of inquries in the past 12 months?

2) also what's your highest credit line? (asking cause another bank will take that into consideration when approved a new LOC)

in mid to high 600 scores, you could still possibly qualify for a Balance Transfer if your util is low enough and you dont have a ton of new accounts/inquiries. You may not need to take any action other than coast along til about a month or 45 days from when the BT expires then open a new account to make sure you have enough time.

your better off to qualify for another BT offer with a 670+ Fico than to ask for a "hardship" program which will result in the account being closed most likely.

I spent almost ten years paying off 150k in cc debt using balance transfers. it can be done and I barely paid any interest aside from BT fees occassionally.

I got a chase freedom card with 655 fico 150k income for 5K which was BT card I used. was also 0% on purchases for 15 mos and had a SUB. I also used Citi Diamond Preferred with a 5k cl approved at 688 fico 150k income got 0% for 18 mos on that one. At one point, Discover also increased my limit from 4k to 12k and I used their constant 12 mo no fee BT offers.

Even American Express offers balance transfers and 0% purchase periods on BCE no annual fee. I got my first amex with a 696 TU Fico

Re: Balance Transfer?

firefox100 — Sun, 04 Feb 2024 06:21:40 GMT

I will say again you don't have many good options, the best is a second mortage you pay lot less intrest then if you try using credit cards. Please note you can not go the BK away again you can't go bk more then once in 20 years. After you pay off your credit cards with second mortage you must stop using creditcards. Also don't call any creditors for help they will close your accounts and you will crash your credit. Good luck.

Re: Balance Transfer?

markbeiser — Sun, 04 Feb 2024 14:19:22 GMT

Turning unsecured debt into debt secured by your home is generally a bad idea if you have not changed your habits, and established a track record of responsible credit use.
I did it with a HELOC, but only after consolidating to a personal loan, and spending a couple of years of debit/cash only living, then when I got new cards, paying them in full before statements cut.
By the time I opened my HELOC a year ago, I was down to under $20k in unsecured debt, and have been paying it off aggressively.

I was not able to do the BT shuffle because I had derogatory items on my reports until late last year, so couldn't get cards with limits high enough for a BT to help.
The BT shuffle is also not sustainable.

Re: Balance Transfer?

Horseshoez — Sun, 04 Feb 2024 14:44:24 GMT

@firefox100 wrote:
I will say again you don't have many good options, the best is a second mortage you pay lot less intrest then if you try using credit cards. Please note you can not go the BK away again you can't go bk more then once in 20 years. After you pay off your credit cards with second mortage you must stop using creditcards. Also don't call any creditors for help they will close your accounts and you will crash your credit. Good luck.

Please note, the above information is highly inaccurate and downright false.

If one filed for a Chapter 7:
- The waiting period for another Chapter 7 is 8-years
- The waiting period to file a Chapter 13 is typically 4-years
If one filed for a Chapter 13:
- There is no waiting period to file a Chapter 7 if all creditors' claims were paid.
- There is no waiting period to file a Chapter 7 if 70% of the creditors' claims were paid and the repayment plan was "Good Faith"
- There is a 6-year waiting period to file a Chapter 7 if neither of the above two conditions were fulfilled
- There is typically a 2-year waiting period from the filing date to file another Chapter 13

Re: Balance Transfer?

NoMoreE46 — Sun, 04 Feb 2024 15:29:24 GMT

You can file for another BK but after eight years from filling. With a Ch 7, one needs to go through the means test. Wiith a Ch 13, there is no means test.

OP, That Disco offer may be the safest chance to extend your time to pay, but you will putting another lien on your home for $8,000 as noted.

Re: Balance Transfer?

firefox100 — Sun, 04 Feb 2024 17:28:11 GMT

OK I was wrong about chapter 7 and 13. Second mortage is the best answer to his problem, but if you do not change your behavior and stop using creditcards and live with in your means, you will be in a bigger whole and could lose your house. You should only do a second mortage if you are going to stop using creditcards and change your spending habits.

Re: Balance Transfer?

youngandcreditwrthy — Sun, 04 Feb 2024 18:53:39 GMT

obviously controlling your spending is NUMBER ONE. If you can try to pay more than the minimums until late april, early May on your current acct(s).. you might be 680+ FICO and be able to qualify for a card that might be as high as your current highest CL on a revolving acct. Don't know too many details about your credit other than what you've stated. Just like the op said, you can't do BTs offers forever. You must have discipline even if could bounce the ball down the road.

but please don't turn unsecured debt into secured debt and risk losing your home. Besides, do you even have enough equity in your home yet? If you've only owned it for 2-3 years and put 3% down and have a 5%+ rate, you prolly don't have a lot of equity.

I learned my lesson with credit cards and 0% offers. I spent a long long time going cash only and paying off all that cc debt but I used balance transfer offers and did it the right way. Of course, I didn't have a home to mortgage, but for those that work in finance.. turning unsecured debt into secured debt, never good idea. Cause in BK, you're allowed at least homestead exemption(cause you could put yourself at increased risk of BK #2 depending your actions henceforth)

Re: Balance Transfer?

ptatohed — Mon, 05 Feb 2024 00:34:58 GMT

I disagree that turning unsecured debt into secured debt is as terrible as several here are saying. A HELOC is a financial tool that is actually a huge benefit to have available. Rates are relatively high right now but, hey, 9% beats a cc 29% any day. If using cc BTs aren't feasible, then adding an $8,000 balance to a HELOC isn't going to be the reason OP loses her house. It sounds like she has put away the ccs so I can only hope she will be spending more responsibly going forward. We don't know everything but we have to assume she is meeting her current mortgage payment and that she has equity. Taking out an $8,000 HELOC loan won't break her. And it is a responsible tool for paying back the money she owes to Discover. She can pay the $8,000 HELOC balance off early, it doesn't need to be dragged out for 30 years. Good luck OP!

Re: Balance Transfer?

firefox100 — Mon, 05 Feb 2024 01:12:24 GMT

Thank you to above poster, that is what I been saying but couple of others think that is bad way to go but taking out a second mortage is not a bad way to go. It may be a better to take a straight loan for fixed amount not line of credit like heloc, a heloc is almost the same as a creditcard but using home as collateral. The only bad thing with Heloc is for OP is you can write a check any time and pull down on line credit. With a fixed loan just pay off all the credit cards then when loan is being paid off balance will go down and op won't be able to we use account , revolving credit what is getting op into trouble.

Re: Balance Transfer?

ptatohed — Mon, 05 Feb 2024 01:22:53 GMT

@firefox100 wrote:
Thank you to above poster, that is what I been saying but couple of others think that is bad way to go but taking out a second mortage is not a bad way to go. It may be a better to take a straight loan for fixed amount not line of credit like heloc, a heloc is almost the same as a creditcard but using home as collateral. The only bad thing with Heloc is for OP is you can write a check any time and pull down on line credit. With a fixed loan just pay off all the credit cards then when loan is being paid off balance will go down and op won't be able to we use account , revolving credit what is getting op into trouble.

Good point and I did think of that pitfall. I wouldn't want OP to see this new LOC as an easy mechanism for pulling out cash. So, for me, if I am giving the advice to OP to go ahead and consider a HELOC to pay off the $8,000 Disco bill, it comes with the caveat to 'only' use it to pay off the Disco bill.