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Any downside to a BT?

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Valued Contributor

Any downside to a BT?

Is there any downside to a 0% BT offer? Don’t really need one jut curious about them since I keep getting offers. I understand the BT fee but beyond that any reason not to?
PERSONAL; Amex | AOD FCU | BBVA | BECU | Capital 1 | Chase | Citi | Discover | Key | NFCU | PSECU | SECU MD | Synchrony | US Bank
BUSINESS; Amex | Citi
F8 Current F8s ~740 Best Ever F8s ~775
TOTAL PERSONAL CL > $350k and TCL > $365k
Message 1 of 12
11 REPLIES 11
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Valued Contributor

Re: Any downside to a BT?


@Caught750 wrote:
Is there any downside to a 0% BT offer? Don’t really need one jut curious about them since I keep getting offers. I understand the BT fee but beyond that any reason not to?

I can think of a couple of downsides:

Utilization can be affected depending on the card’s limit and BT amount.

With the exception of Cap One (that I know of), you may lose your grace period on new purchases, so the card would need to be SDed. If it’s a card that you use a lot, you won’t be able to use it till the BT balance is paid off or you’ll incur interest charges if you make any purchase and not pay off the entire balance (including BT) by the payment due date.

AMEX | BofA | Barclays | Cap One | Chase | Citi | Discover | GS | PenFed | SYNCB (PP MC, Lowe's, Amazon, PP Credit) | US Bank
Message 2 of 12
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Valued Contributor

Re: Any downside to a BT?

I was looking at more of a scoring type downside, aside from Util which you mentioned. Sorry, should have been more specific. Hypothetically we’ll call it a new Disco account with 0% Purchase and BT and Util is a wash.
PERSONAL; Amex | AOD FCU | BBVA | BECU | Capital 1 | Chase | Citi | Discover | Key | NFCU | PSECU | SECU MD | Synchrony | US Bank
BUSINESS; Amex | Citi
F8 Current F8s ~740 Best Ever F8s ~775
TOTAL PERSONAL CL > $350k and TCL > $365k
Message 3 of 12
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Valued Contributor

Re: Any downside to a BT?


@Caught750 wrote:
I was looking at more of a scoring type downside, aside from Util which you mentioned. Sorry, should have been more specific. Hypothetically we’ll call it a new Disco account with 0% Purchase and BT and Util is a wash.

Gotcha.

Well, you know your scores will most likely take a hit from the HP, the new account, and again, UTIL based on how much you transfer.

But how much of a hit would be hard to determine. I’m not sure anyone can predict your score drop.

AMEX | BofA | Barclays | Cap One | Chase | Citi | Discover | GS | PenFed | SYNCB (PP MC, Lowe's, Amazon, PP Credit) | US Bank
Message 4 of 12
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Valued Contributor

Re: Any downside to a BT?

I’m simply trying to answer curiosities. No HP, no new account, none of that. The simple act of a balance transfer. I’m not asking about anything except simply transferring a balance. Also, I’m only really asking because I see it discussed often yet I know nothing about it.
PERSONAL; Amex | AOD FCU | BBVA | BECU | Capital 1 | Chase | Citi | Discover | Key | NFCU | PSECU | SECU MD | Synchrony | US Bank
BUSINESS; Amex | Citi
F8 Current F8s ~740 Best Ever F8s ~775
TOTAL PERSONAL CL > $350k and TCL > $365k
Message 5 of 12
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Super Contributor

Re: Any downside to a BT?


@Caught750 wrote:
I’m simply trying to answer curiosities. No HP, no new account, none of that. The simple act of a balance transfer. I’m not asking about anything except simply transferring a balance. Also, I’m only really asking because I see it discussed often yet I know nothing about it.

Your next move should be to actually do a Balance Transfer to Discover. Comments from many of us are based on long experience with using Balance Transfers. The real way to learn about BT, is to start with a small one, and Discover is an excellent place to start.

 

Use the $0 fee 4.99% BT Offer if you have it. Transfer something small, like $200 from another card, maybe the AMEX Gold, onto the Discover card. Let the statement report, see the ~$1 of interest cost post, and pay $50 for the month. The balance will go down the next month, a small interst cost the next month, and in a couple of months you have it paid off.

 

Or use the 0% Interest offer, at whatever the BT Fee is (could be 3%, could be up to 5% fee now) and same thing. The fee will post, your next statement won't have interest cost on the card, the BT typically runs 12 months I think.

 

It is not rocket science, but it is best learned through experience. Small BT are not an issue. Massive BT can cause problems. It all depends.

High Bal Jan 2009 $116k on $146k limits 80% Util.
Oct 2014 $46k on $127k 36% util EQ 722 TU 727 EX 727
April 2018 $18k on $344k 5% util EQ 806 TU 810 EX 812
Jan 2019 $7.6k on $360k EQ 832 TU 839 EX 831
Message 6 of 12
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Valued Contributor

Re: Any downside to a BT?

There’s no penalization for the simple act of transferring a balance. You only get affected based on any changes to your profile after the BT.

If you’re transferring between 2 cards you already have, there may be a score drop if both report the same balance to the bureaus. This happens a lot because cards report at different times. Once the card carrying the old balance updates to $0, it should all go back to normal.

I don’t think there’s any negative effect on your scores other than UTIL. 

AMEX | BofA | Barclays | Cap One | Chase | Citi | Discover | GS | PenFed | SYNCB (PP MC, Lowe's, Amazon, PP Credit) | US Bank
Message 7 of 12
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Valued Contributor

Re: Any downside to a BT?

NRB, so basically it doesn’t hurt anything as long as your Util doesn’t get all messed up? Also you’re saying just do one for educational purposes? While I don’t need to I’m not opposed to doing it especially since it could show some activity on a Disco I haven’t used in a while.
PERSONAL; Amex | AOD FCU | BBVA | BECU | Capital 1 | Chase | Citi | Discover | Key | NFCU | PSECU | SECU MD | Synchrony | US Bank
BUSINESS; Amex | Citi
F8 Current F8s ~740 Best Ever F8s ~775
TOTAL PERSONAL CL > $350k and TCL > $365k
Message 8 of 12
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Valued Contributor

Re: Any downside to a BT?

Excellent, thank you. That’s basically what I was trying to figure out. Penalization is simply a utilization issue.
PERSONAL; Amex | AOD FCU | BBVA | BECU | Capital 1 | Chase | Citi | Discover | Key | NFCU | PSECU | SECU MD | Synchrony | US Bank
BUSINESS; Amex | Citi
F8 Current F8s ~740 Best Ever F8s ~775
TOTAL PERSONAL CL > $350k and TCL > $365k
Message 9 of 12
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Established Contributor

Re: Any downside to a BT?

From a scoring perspective, the bureaus are not even aware you did it, so there is no impact. It looks to them like you paid card 1 down by $X and ran up $X + BT fee in normal spending on card 2 at the same time.
Message 10 of 12
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