Balance Chasing - Stopping the Bleeding

[Anonymous]

Hi Everyone!

Last year I took advantage of a slew of 0% APR balance transfer offers to help finance the cash purchase of a house. Fast forward a year and I find myself in a situation where all of my cards but Chase are balance chasing as I pay them off. To make matters more complicated, I inherited a cash sum as expected that would allow me to pay off either my Chase cards completely or spread payments fairly equally, the result of both being an overall utilization of about 29%. I was leaning toward spreading out the payments to reduce overall exposure at each bank, but given that Chase is the only one not taking AA yet, I also want to take care of that balance first and hope they won't give me a CLD.  Again, my other cards are chasing to the point where I'm staying at or above 90% utilization and Bank of America has cut ties completely. Any thoughts or advice would be highly welcome!

EDIT

Below are the cards I currently have open and their respective utilization. My credit profile is fairly tenured, with my newest card being 3-4 years ago and a fair mix of other credit/loans in good standing. Again, I'm trying to determine how to apply about 45k to these balances in a way that would hopefully the balance chasing all but Chase are enacting on those with an open balance. Would calling Chase and explaining my intentions help or even possibly hurt?

American Express Cash Magnet 7k/96%

American Express Everyday 1k/0%

American Express Blue 1k/0%

Mercury 5.5k/0%

Capital One Platinum 1.5k/0%

Capital One Playstation 6k/0%

Capital One Quicksilver 4k/0%

Chase Amazon 2k/74%

Chase Freedom 0.5k/0%

Chase Disney 19k/92%

Chase Saphire 19k/92%

Citi Simplicity 4k/90%

City Double Cash 10k/96%

Discover IT 3.5k/82%

Discover Cash Back 1k/92%

Regions Bank 4.5k/84%

Store Credit

Wayfair 11k/0%

Home Depot 3k/88%

Kohls 1.5k/0%

Total 106k/64%

[FinStar]

Sorry to hear about the AA/balance chasing situation. Unfortunately, when a bank's risk algorithm is set in motion, there really isn't a method to stop the bleeding per se. Even if you call and explain the situation, it's not something where an agent can manually override in most cases.

In general, the best thing to do is to cut those losses and pay down any indebtness as best as you can so that any score impacts can be addressed and recovered to a certain extent since it appears most of your revolvers are going to be reporting as maxed. Did BoA close your accounts?

It would be helpful to list your current revolving accounts, CLs and their respective balances (APRs if known) so that the community can provide some guidance on next steps.

[Anonymous]

You might be better off using the  “snowballing method”. This is where you pay off one card completely then the next etc. etc. Start with the smallest debt. Pay it down to 0. Let the chasing algorithm chase you down. Let a statement close with your new low limit. Then once it stops call in and ask for a CLI. They will not restore your old limit but they will usually give you something. Banks do not want to lose money but they also want to make money. If you get chased down to a few hundred bucks (which is likely) they know that card is done making money for them. You borrowed money, you paid them back, so they are usually willing to give you a bit back. Again don’t expect your old limits right away but they are inclined to give you some breathtaking room.

All of this is assuming they chased you for maxing all your cards not for lates, or over the limit, or returned payments. If any of those occurred you are likely stuck with those limits for a while. ymmv

[Anonymous]

Chase isn’t cutting your CLs which is good, but where do your Chase balances stand vis-a-vis your other balances on cards that are being reduced? I understand completely that you want to keep them happy as they aren’t balance chasing you, but if you have comparatively low utilization on the Chase cards, that may be a factor in their maintaining the existing lines. If so, you may be best to try and pay down/pay off the others to stop the balance chasing before Chase gets in on the act too. If all of your lines are high though, then yes I could see wisdom in paying Chase first and foremost.

[SouthJamaica]

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@Anonymous wrote:

Hi Everyone!

Last year I took advantage of a slew of 0% APR balance transfer offers to help finance the cash purchase of a house. Fast forward a year and I find myself in a situation where all of my cards but Chase are balance chasing as I pay them off. To make matters more complicated, I inherited a cash sum as expected that would allow me to pay off either my Chase cards completely or spread payments fairly equally, the result of both being an overall utilization of about 29%. I was leaning toward spreading out the payments to reduce overall exposure at each bank, but given that Chase is the only one not taking AA yet, I also want to take care of that balance first and hope they won't give me a CLD.  Again, my other cards are chasing to the point where I'm staying at or above 90% utilization and Bank of America has cut ties completely. Any thoughts or advice would be highly welcome!

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I would spread it around, try to get them off your back.

[Anonymous]

OP, how does the rest of your file look outside of the high utilization spike due to the 0% offers you took advantage of?  Do you have late payments on your CR?  Is your file young or thin?  I ask these questions because rarely have I seen multiple creditors take AA just due to high utilization if the rest of one's profile is sound.  9 times out of 10 there's other reasons for it and the utilization increase is just the straw that broke the camels back.

[Anonymous]

I just updated my post with additional balance info. Other than that, no negative information, fairly tenured accounts, and diverse credit types.

[FinStar]

Thanks for updating your post with the additional details . One thing that I would not recommend is calling Chase. This can likely open up a can of worms or have some unintended consequences.

Thankfully, as you've confirmed, the balance chasing ramifications across the majority of your accounts, do not necessarily involve any recent derogatories.

In addition to the posted CCs, do you have any open mortgage and/or installment accounts? Do the BoA accounts have any balances or are those paid off/closed?

[mikesonthemend]

As long as it is just balance chasing, and you continue to make payments, this is temporary. Snowballing, as mentioned above is an option, as is going after highest APR first. As long as you have the means (cash flow) to meet your obligations you will be fine. Your FICO score only really matters when you need to acquire credit.

[Cred4All]

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@Anonymous wrote:

Hi Everyone!

Last year I took advantage of a slew of 0% APR balance transfer offers to help finance the cash purchase of a house. Fast forward a year and I find myself in a situation where all of my cards but Chase are balance chasing as I pay them off. To make matters more complicated, I inherited a cash sum as expected that would allow me to pay off either my Chase cards completely or spread payments fairly equally, the result of both being an overall utilization of about 29%. I was leaning toward spreading out the payments to reduce overall exposure at each bank, but given that Chase is the only one not taking AA yet, I also want to take care of that balance first and hope they won't give me a CLD.  Again, my other cards are chasing to the point where I'm staying at or above 90% utilization and Bank of America has cut ties completely. Any thoughts or advice would be highly welcome!

EDIT

Below are the cards I currently have open and their respective utilization. My credit profile is fairly tenured, with my newest card being 3-4 years ago and a fair mix of other credit/loans in good standing. Again, I'm trying to determine how to apply about 45k to these balances in a way that would hopefully the balance chasing all but Chase are enacting on those with an open balance. Would calling Chase and explaining my intentions help or even possibly hurt?

American Express Cash Magnet 7k/96%

American Express Everyday 1k/0%

American Express Blue 1k/0%

Mercury 5.5k/0%

Capital One Platinum 1.5k/0%

Capital One Playstation 6k/0%

Capital One Quicksilver 4k/0%

Chase Amazon 2k/74%

Chase Freedom 0.5k/0%

Chase Disney 19k/92%

Chase Saphire 19k/92%

Citi Simplicity 4k/90%

City Double Cash 10k/96%

Discover IT 3.5k/82%

Discover Cash Back 1k/92%

Regions Bank 4.5k/84%

Store Credit

Wayfair 11k/0%

Home Depot 3k/88%

Kohls 1.5k/0%

Total 106k/64%

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Total Credit Lines: 106k

Goal Utilization: 29%

Goal Balance to Achieve 29% Util: Approx $30k

Determination w/ $45k available: Doable!!

Op, quickly and without 'exact' math, getting back to normal-ville is quite doable in my mind.  You can't immediately be concerned with the balance chasing, that can iron itself out over time if they choose to allow future CLI's, but for the right now, here is what 'I' would do as an example:

1.  Chase Disney & Chase Sapphire
   1. If these each of a $19k credit line, and you are at $92%, then the combined balance is roughly around $35k. You want these balances on each card to be no higher than $5500 to stay below a comfortable 29% UTIL.  Not just due to FICO concerns and bank risk concerns, but also because if the 0% APR is ending anytime soon, you sure as heck don't want to be stuck with paying interest on $35k, that alone could wipe you out.
      1.  Pay $12,000 minimum on each card ($24k total)
      2. Total balance remaining $5500 on each, and total cash to put towards the below - $21k
2.  Citi Double Cash
   1. If this card is at 96% UTIL with a credit line of $10k, your balance is around $9600.  Using the example above, we want to get that down to 29% or so of the available credit line which would mean paying an additional $6700 toward the balance.  
      1. Pay $6700 on City Double Cash
      2. Total balance remaining $2900, total cash to put towards the below - $14,300.
3. Citi Simplicity
   1. If this card is at 90% UTIL on a credit line of $4k, your balance is around $3600. I'd simply (Pun intended) pay this off entirely for the additional $0 showing on your profile.
      1. Pay $3600 (PIF Pay in full) the Citi Simplicity
      2. Total balance remaining $0, total cash to put towards the below - $10,700
4. Regions Bank
   1. If this card is at 84% UTIL of $4500 in available credit, your balance is around $3780. Same as above, pay this in full.
      1. Pay $3780 (PIF) the Regions Bank Card
      2. Total balance remaining $0, total cash to put towards the below - $6,920
5.  Discover IT
   1. If this card is at 82% UTIL of $3.5k, your balance is around $2870.  Discover is usually pretty average with APRs I'm guessing, so lets get this below 29% as well and make it easier to bang out in the future.
      1. Pay $1855 on the Discover IT card
      2. Total balance remaining $1,015, total cash to put towards the below - $5,905
6.  Home Depot
   1. If this card is at 88% UTIL of 3k, your balance is around $2640.  I'd just pay this in full if it were me.
      1. Pay $2640 on Home Depot.
      2. Total balance remaining $0, total cash to put towards the below - $3,265
7. Discover Cashback
   1. If this card is at 92% UTIL of 1k, you're around $920.
      
      1. Pay $920 on Discover Cashback
      2. Total balance remaining $0, total cash SAVED IN YOUR POCKET for a rainy day of the original $45k = $2,345

Remaining balances across most of the cards: $15k

Overall UTIL after the above: 14%

Again this is quick math and an example of paying things down quickly.  It does not take into consideration things I can't possibly be aware of like your income, bonuses, personal expenditures, how many dates you have lol, or the changing %'s based on the balance chasing.  Hope this helps!