topic Re: I have 6 balances in Credit Cards

I have 6 balances

Alex311 — Tue, 25 Jun 2024 13:47:09 GMT

I currently have 6 balances, but I can do a balance transfer and consolidate those to 2 balances, but those 2 cards would be pretty much maxed out or around 90%.

Score wise would it gice me a boost if I consolidate the balances and have two high balances reporting or should I just wait and play the long game?

Re: I have 6 balances

flexin222 — Tue, 25 Jun 2024 14:06:08 GMT

Great post Alex, I've done a few balance transfers and along with the fees you gotta watchout for interest at the place you transferred to. I didn't think about it early in my credit journey and they got me for a minute. Depending on what your utilization is on those 6 balances, it could help or hurt you as far as credit scores. If you can keep close to 30% on most of em and balance transfer the higher percentages down, it would definitely help in my opinion. That's my opinion, but I'm sure we have other MyFico fam with more experience. Rock on Alex!

Re: I have 6 balances

CreditCurious — Tue, 25 Jun 2024 14:20:32 GMT

It will probably hurt your credit score, but that really depends on how much you owe and the credit limits involved.

Scores are calculated both on overall UTI, as well as individual card UTI. Transferring debt from one card to another does not change the overall UTI, but on the individual cards, you will wind up with 4 cards with low/no balance, and 2 cards with high balances. If the 2 cards with high balances are at significant UTI, the negatives for these two may outweigh the positives for the other 4.

However, if this transfer is to take advantage of low or no interest balance transfers, which will let you pay down debt faster during the no interest phase, it may be worth doing.

Re: I have 6 balances

MissLiz — Tue, 25 Jun 2024 14:37:24 GMT

I think this is a situation where "Finance over FICO" comes into play. If doing the BT's saves you money in interest charges thus allowing you to use that money to pay down your debt faster, then that's the logical choice regardless of how it affects your scores.

Re: I have 6 balances

pizzadude — Tue, 25 Jun 2024 15:35:33 GMT

Agree, you should run the numbers to see how much interest you'd save by transferring and how quickly you'd be able to pay the balances down.

Re: I have 6 balances

keekers — Tue, 25 Jun 2024 15:36:44 GMT

@MissLiz wrote:
I think this is a situation where "Finance over FICO" comes into play. If doing the BT's saves you money in interest charges thus allowing you to use that money to pay down your debt faster, then that's the logical choice regardless of how it affects your scores.

Bingo.

Re: I have 6 balances

SouthJamaica — Tue, 25 Jun 2024 16:53:20 GMT

@Alex311 wrote:
I currently have 6 balances, but I can do a balance transfer and consolidate those to 2 balances, but those 2 cards would be pretty much maxed out or around 90%.

Score wise would it gice me a boost if I consolidate the balances and have two high balances reporting or should I just wait and play the long game?

No it would not help your scores. You should try to have no reported balances over 28%.

Re: I have 6 balances

Thomas_Thumb — Tue, 25 Jun 2024 18:08:30 GMT

@Alex311 wrote:
I currently have 6 balances, but I can do a balance transfer and consolidate those to 2 balances, but those 2 cards would be pretty much maxed out or around 90%.

Score wise would it gice me a boost if I consolidate the balances and have two high balances reporting or should I just wait and play the long game?

Scores would drop considerably. The # of cards with balances is a minor factor on Fico 8 and more recent Fico algorithms. Individual card utilization is more impactful.

Fico penalizes based on card with the highest utilization level. It should be kept below 49%. Maxing out cards can be very detrimental scorewise.

Not sure how many cards you have in total. You do want to avoid 100% with balances. Beyond that focus on keeping cards under 49% UT. Then take more cards to $0.

Your question is specific to score so I answered accordingly.

Re: I have 6 balances

FlaDude — Tue, 25 Jun 2024 19:20:03 GMT

Are any of the existing cards already reporting over 90%? If you are moving from 6 maxed out cards to two, that could help your score. If you are moving from 6 cards at much lower utilization to 2 maxed out cards, then as other posters have mentioned, it can hurt. Even so, if it saves money and helps get your debt paid down or off, then could be worth a short term score loss.

Re: I have 6 balances

Gregory1776 — Tue, 25 Jun 2024 23:58:07 GMT

I am / was in the same boat. I chose to throw everything I have at my cards until the end of the year, probably not leaving me with much savings at the end of it, but I'll be paying of (at this moment) $17,500+, 10K on my Wells Fargo, 7.5K on my chase. (Apr offer.)

I am not concerned with the scores, but I'm avoiding balances being reported on more than 3 cards that are carrying balances. My scores are surprisingly high due to my utilization.

Re: I have 6 balances

markhs777 — Wed, 26 Jun 2024 01:31:58 GMT

@CreditCurious wrote:
It will probably hurt your credit score, but that really depends on how much you owe and the credit limits involved.

Scores are calculated both on overall UTI, as well as individual card UTI. Transferring debt from one card to another does not change the overall UTI, but on the individual cards, you will wind up with 4 cards with low/no balance, and 2 cards with high balances. If the 2 cards with high balances are at significant UTI, the negatives for these two may outweigh the positives for the other 4.

However, if this transfer is to take advantage of low or no interest balance transfers, which will let you pay down debt faster during the no interest phase, it may be worth doing.

This is on the money. The number of cards with balances won't hurt your scores much as long as the utilization rate is low compared to a few balances with high rates. After all banks want you to use the cards. Most users don't pay before the statement cuts so of course you will have a balance even if you pay in full every month.

Re: I have 6 balances

Johnestime — Wed, 26 Jun 2024 05:29:54 GMT

Alex, do you actually have those cards.?