Balance Transfer Credit Card or Loan?

Repairman · ‎02-17-2019

Ok guys, I just recently joined a credit union with both a balance transfer credit card option and a balance transfer loan available. My scores are currently mid 600s which isn't horrible but isn't great. I want to get wither the loan or the credit card from my cu in order to pay much less in interest on my current high interest cc debt.

Since my scores aren't fantastic, I'm wondering if I'd have a better chance on being granted a higher limit Balance Transfer loan from my credit union as opposed to a credit card to perform the balance transfer to. What do you think?

Anonymous · ‎02-17-2019

I’ve gotten quite a few balance transfer in the last 4 years for one reason or another. It would depend on how much credit debt you want to transfer and what the interest rate is. Personally I would go with a loan instead of a balance transfer unless you can pay that balance off in the time allotted. The longest one I have had was 18 months. My loan I picked 5 years and I’m glad I did since in the midst I lost my job.

You may be able to get a good loan at your credit union it also is something to look into. It also depends how much you are wanting to transfer. What is your utilization at?

Repairman · ‎02-18-2019

The amount of time isn't a factor as the credit card option is a 6 month period of 2.9% interest and then the APR changes to and stays at 7.9% interest. The "Balance Transfer Loan" which they offer specifically for members to pay off credit card debt, is a fixed 8.9% rate. On face value, the cc option is better, but I'm concerned about approval and balance due to my scores. I am looking to transfer as much as $25,000. I'm wondering if I would be likely to receive a much larger loan than a credit card limit. I'm probably sitting at about 66% utilization.

Anonymous · ‎02-20-2019

Do you have military experience or family with military experience?

If so, I would think Navy Federal Platinum Card would be a good bet.

Has the features you need: lenient underwriting and no balance transfer fee.

You might not get approved and might not get limit you want, but if Navy won’t then I do not know who would.

Repairman · ‎02-20-2019

I am eligible to join Navy Federal Credit Union, but I already am a member of another credit union that is offering what I described. I actually haven't ever compared NFCU's products and rates.

Anonymous · ‎02-20-2019

I have been offered more on loans than a credit card in the past. But that doesn’t always mean it is the Better option. The interest portion the credit card would be a better option but the loan is specifically set up at your credit union for this. I would talk with a personal banker at your branch and see if you can get more information. If I were the one looking into it I would do the loan because it does report a tad different on your credit bureau. I transferred about $20,000 of cc debt when I got mine and my utilization for that loan isn’t considered but it is stated that the balance is still high compared to what was lent. Of course I have only been making the minimum monthly payments and round up to make it even. I’ve only have it 13 months now. A couple things to think about.

Danielle

Repairman · ‎02-21-2019

missd1985 did your score go up at all when you transferred your cc debt to the loan?

Anonymous · ‎02-21-2019

Yes it did. My score went down when the loan hit my credit as a new account. Than once all my cards got reported it went down and as my utilization hit lower I got some score jumps for that as well. I think all together it went up about 40 points or so. I got one loan and 8 months later I got a second loan to pay that off and to pay the rest of my America express card since the first loan didn’t pay everything. When I closed out the first loan my score dropped about 15 points. When the new one came through and everything was paid it went up another 25 or so.

Repairman · ‎02-21-2019

Your score jumps are great! I'm confused though, as to what you mean about closing the 1st loan? Excuse my ignorance, as this will be my 1st loan experience. Do you mean when you paid it off in full, your score dropped? Or after you paid it in full, the funds were still available for you to use again, but you instead had to literally close it, and that caused your score to drop?

@Anonymous wrote:
Yes it did. My score went down when the loan hit my credit as a new account. Than once all my cards got reported it went down and as my utilization hit lower I got some score jumps for that as well. I think all together it went up about 40 points or so. I got one loan and 8 months later I got a second loan to pay that off and to pay the rest of my America express card since the first loan didn’t pay everything. When I closed out the first loan my score dropped about 15 points. When the new one came through and everything was paid it went up another 25 or so.

Anonymous · ‎02-21-2019

No the first loan I got was for $10,000 but it left about $6,000 left over that wasn’t paid. About 8 months later I got an email to check my rate. I was going to save me 5% interest and it would be enough to pay my current loan off in full and my remaining credit card debt. The account once paid off was closed and new one was opened for $15k. So that closure is what dropped my score.