topic Re: Adverse action for BT? in Rebuilding Your Credit

Adverse action for BT?

jmcmillan — Mon, 06 Feb 2023 18:09:26 GMT

Would I be at risk if I did a BT to my Discover card if I used 90% of my credit line? I really want to take advantage of the 0% balance transfer offer, but I don’t want to be balanced chased, or any other adverse action. I would not actively be applying for credit during this time. I calculated my overall util would be about 30%.

Re: Adverse action for BT?

TRC_WA — Mon, 06 Feb 2023 18:43:44 GMT

@jmcmillan

It didn't happen to me. I have some 0% BT offers in force right now on my Reflect and Ollo Rewards cards... both were at 80-90% of the limit when I took them out and I never saw any AA from anyone.

Didn't see any major score drops either... although I know once I pay them down my scores will go up.

Re: Adverse action for BT?

FireMedic1 — Mon, 06 Feb 2023 19:34:25 GMT

I got the offer also. Dont need it. But. Disco is very rare to see balance chasing. Last time was yrs ago. But the poster had all kinds of issues. Without knowing your other cards. Should be fine.

Re: Adverse action for BT?

Remedios — Mon, 06 Feb 2023 20:02:51 GMT

@jmcmillan wrote:
Would I be at risk if I did a BT to my Discover card if I used 90% of my credit line? I really want to take advantage of the 0% balance transfer offer, but I don’t want to be balanced chased, or any other adverse action. I would not actively be applying for credit during this time. I calculated my overall util would be about 30%.

Disco will not balance chase you providing that your payments are adequate. Id make sure to not pay anywhere near minimum because Disco is reporting increases in losses, that's when chance of AA increases.

None of that means that other lenders would or wouldn't take AA. Some are fine, others might jump on it.

If you are rebuilding, I wouldn't do 90%.

Just because it didn't happen to someone else, it doesn't mean it won't happen to you.

Conversely, just because someone else experienced AA, it doesn't mean you will.

So, in a nutshell, Disco is fine as longs as payments don't make it look like they may end up holding the bag.

Your other lenders, that's trickier part.

Re: Adverse action for BT?

CYBERSAM — Mon, 06 Feb 2023 20:10:58 GMT

@jmcmillan wrote:
Would I be at risk if I did a BT to my Discover card if I used 90% of my credit line? I really want to take advantage of the 0% balance transfer offer, but I don’t want to be balanced chased, or any other adverse action. I would not actively be applying for credit during this time. I calculated my overall util would be about 30%.

This should not be an issue! However make sure that you pay 3 or 4X the minimum payment amount, otherwise you are at high risk of AA.

Few years ago I did BT with Disco and by paying minimum payment for few months! I got AA from Disco and Cap1.

@RemediosIs always on top of things! Sry to post the same thing, your too quick

Re: Adverse action for BT?

TRC_WA — Mon, 06 Feb 2023 20:09:21 GMT

@Remedios wrote:
If you are rebuilding, I wouldn't do 90%.
Just because it didn't happen to someone else, it doesn't mean it won't happen to you.

Very true. Even though I said I had no AA for my 80-90% BT's I did... I'm not gonna lie... I was nervous that AmEx might do something with my $10k card like drop my CL but they didn't. It's been months now so not really worried about it any more. AmEx is still watching me like a hawk though... can't get a CLI till the Ch 13 falls off and they've pulled my reports pretty much every month. I have good history with them though... both previously and with the new account that has been PIF for 8 months with good usage.

@CYBERSAM wrote:
This should not be an issue! However make sure that you pay 3 or 4X the minimum payment amount, otherwise you are at high risk of AA.
Few years ago I did BT with Disco and by paying minimum payment for few months! I got AA from Disco and Cap1.

Good advice too.

I forgot to mention... in my BT's I've generally paid about 10x the minimum... no AA.

Re: Adverse action for BT?

jmcmillan — Mon, 06 Feb 2023 20:16:28 GMT

@Remedios wrote:

If you are rebuilding, I wouldn't do 90%.

I am rebuilding, that's why I'm worried about doing it.

Re: Adverse action for BT?

FireMedic1 — Mon, 06 Feb 2023 20:20:28 GMT

@jmcmillan

Just an idea. May keep your mind at ease. Why not 50% of what you wanted to BT? Still saves some $.

Re: Adverse action for BT?

Remedios — Mon, 06 Feb 2023 20:22:30 GMT

@jmcmillan wrote:
@Remedios wrote:

If you are rebuilding, I wouldn't do 90%.

I am rebuilding, that's why I'm worried about doing it.

If I may ask, how much are you wanting to transfer and which term in months?

Let's pretend it's $1000.00. if you are paying $100, you should be just fine, balance is noticeably going down. If you're planning on paying $35.00, I'd worry a little.

So, if you take the total amount you're trying to BT, divide it in 12 equal payments, it should work. To Disco, it indicates BT will be payed off. Once balance gets lower, making smaller payment won't be a big issue.

If you're doing 18 months, your first 3 payments should be larger (Not large enough to defy a purpose for doing BT, only to drop it down so it gives appearance of balance going down on the report), then divide rest of the balance by remaining number of months and set it to cruise

Re: Adverse action for BT?

jmcmillan — Mon, 06 Feb 2023 21:08:15 GMT

@FireMedic1 @Remedios

Let me provide more details. I am trying to pay off a predatory student loan that is costing me a fortune, and I’m close to having enough money to pay it off, but I am about $3500 short. My credit line with Discover is $3700. I would take the $300 that I’m paying for the student loan and apply it to Discover. I am expecting a bonus from work in August, so I would likely have it paid off then. I would likely choose the 12 months for 0% offer.

Re: Adverse action for BT?

Remedios — Mon, 06 Feb 2023 21:13:23 GMT

@jmcmillan wrote:
@FireMedic1 @Remedios

Let me provide more details. I am trying to pay off a predatory student loan that is costing me a fortune, and I’m close to having enough money to pay it off, but I am about $3500 short. My credit line with Discover is $3700. I would take the $300 that I’m paying for the student loan and apply it to Discover. I am expecting a bonus from work in August, so I would likely have it paid off then. I would likely choose the 12 months for 0% offer.

Go for it, it should be perfectly fine with $300 payment. I see no reason to continue bleeding money on SL with that type of payment.

Re: Adverse action for BT?

TRC_WA — Mon, 06 Feb 2023 21:17:37 GMT

Yeah I'd do the same.

Honestly though I had no idea predatory student loans existed. I had some a while back for a small amount with a ridiculously low interest rate... I was literally paying a few dollars a month in interest on $3k in loans.

Re: Adverse action for BT?

FireMedic1 — Mon, 06 Feb 2023 21:18:41 GMT

Jump on it. Nuff said.

Re: Adverse action for BT?

coldfusion — Mon, 06 Feb 2023 21:40:49 GMT

@Remedios wrote:
@jmcmillan wrote:
@FireMedic1 @Remedios

Let me provide more details. I am trying to pay off a predatory student loan that is costing me a fortune, and I’m close to having enough money to pay it off, but I am about $3500 short. My credit line with Discover is $3700. I would take the $300 that I’m paying for the student loan and apply it to Discover. I am expecting a bonus from work in August, so I would likely have it paid off then. I would likely choose the 12 months for 0% offer.
Go for it, it should be perfectly fine with $300 payment. I see no reason to continue bleeding money on SL with that type of payment.

Very much this. In essense you'd be treating the balance transfer as if it were a 0% APR installment loan.

Re: Adverse action for BT?

jmcmillan — Mon, 06 Feb 2023 22:07:06 GMT

@TRC_WA wrote:

Honestly though I had no idea predatory student loans existed. I had some a while back for a small amount with a ridiculously low interest rate... I was literally paying a few dollars a month in interest on $3k in loans.

This is a private student loan that I got as a freshman in 2003, when banks were passing these things out like candy. I've been paying between $250 and $289/month for about 13 years, and I still owe $19,000 out of $20,000 from the original loan. Unfortunatley, I was under employeed for a long time after college, and I'm just now getting my head above water. This loan will end up costing me over $50,000 when I'm done.

Re: Adverse action for BT?

TRC_WA — Mon, 06 Feb 2023 22:10:54 GMT

@jmcmillan wrote:
@TRC_WA wrote:

Honestly though I had no idea predatory student loans existed. I had some a while back for a small amount with a ridiculously low interest rate... I was literally paying a few dollars a month in interest on $3k in loans.
This is a private student loan that I got as a freshman in 2003, when banks were passing these things out like candy. I've been paying between $250 and $289/month for about 13 years, and I still owe $19,000 out of $20,000 from the original loan. Unfortunatley, I was under employeed for a long time after college, and I'm just now getting my head above water. This loan will end up costing me over $50,000 when I'm done.

@jmcmillan

OMG. I had no idea. I've heard of payday and title pawn loans like that but had no clue SLs did the same.

It should be illegal IMO.

Since you've told me this I would say absolutely do the BT... and honestly I'd still do it even if they told me they'd AA my account because it looks like you are in a SL that you will never get out from under.

Best of luck.

Re: Adverse action for BT?

FireMedic1 — Mon, 06 Feb 2023 22:48:20 GMT

Whoa. Quit typing here and fill out the BT form like.........now!

Re: Adverse action for BT?

jmcmillan — Mon, 06 Feb 2023 23:04:01 GMT

@FireMedic1 wrote:
Whoa. Quit typing here and fill out the BT form like.........now!

I know, right! I have to liquify some assets so it will take a little time. But I'm basically leaving myself with just a $1,000 emergency fund so I can get rid of this thing.

Re: Adverse action for BT?

jmcmillan — Mon, 06 Feb 2023 23:07:20 GMT

@TRC_WA wrote:

It should be illegal IMO.

I agree. I actually considered suing and I had a couple names for lawyers. One wouldn't call me back when he said he would, and the other died. I decided I probably wouldn't win anyway.

Re: Adverse action for BT?

LakeLife — Tue, 07 Feb 2023 12:37:08 GMT

@jmcmillan wrote:
Would I be at risk if I did a BT to my Discover card if I used 90% of my credit line? I really want to take advantage of the 0% balance transfer offer, but I don’t want to be balanced chased, or any other adverse action. I would not actively be applying for credit during this time. I calculated my overall util would be about 30%.

I've had the opposite experience with Discover. It's been times when I was at a high utilization using BT offers from them, that I was able to obtain CLIs. Obviously, the entire credit profile it taken into account, but that's the only time I've been able to get CLIs from them.