Balance Transfer Question???

[mikie209]

I currently have a CAP1 Rewards card with a $0 balance and a $500 Credit Limit. I  have a permenent 4% interest rate and 4% rate on balance transfers with no fees.

I have another card that has a 16.99 interest rate with about $2500 balance. Should I transfer a small balance (about $400 at a time)  to my CAP1 or should I continue to pay this card and not occur a balance on my CAP1 card?

[Closingracer99]

I wouldn't transfer $400 considering the limit.... That util would be high on that card.

[takeshi74]

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@mikie209 wrote:

Should I transfer a small balance (about $400 at a time)  to my CAP1 or should I continue to pay this card and not occur a balance on my CAP1 card?

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You need to consider revolving utilization on cards used for balance transfers as well.  400 / 500 is 80%.  General suggestion is do not exceed 30%.  You really just need to pay down your balances and work on addressing the reasons why you racked up the debt in the first place.

[mikie209]

It's my only card with a balance. That's why I was wondering if I should take advantage of the 4% since it's locked in and no balance transfer fees. Even tho it's not paying off the whole card. Or just keep paying extra on the high interest card.

[NRB525]

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@mikie209 wrote:
It's my only card with a balance. That's why I was wondering if I should take advantage of the 4% since it's locked in and no balance transfer fees. Even tho it's not paying off the whole card. Or just keep paying extra on the high interest card.

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Yes, go for it. It will remove part of that other balance, just that much less interest to pay.

And long term consider apping another Cap One, get that higher CL and then 6 months later move the limit to the existing Rewards card. That is a killer APR to have.

[Kevin86475391]

That is a great APR to have! Congrats! Pretty cool that there's no BT fee too!

I'd be focusing on trying to get a CLI on that card.

Regarding the BT to the new card, the math works out to a 12.99% APR difference and on a $400 balance that comes to $51.96 as a hypothetical maximum yearly savings. However, it doesn't come out so neatly since obviously the balance won't stay $400 for a year due to interest/compounding interest and actual payments, plus any new charges. So depending on how quickly you plan to pay it off, I'd estimate a potential savings of maybe $40-$50.

Really the question is, is a potential savings in that ballpark (more or less depending on your payment schedule) worth it to you to spike the utilization on the Cap1 card? Certainly up to you to decide, but for me it would be a resounding no. Especially since you have that nice 4% APR locked down. I wouldn't want to spook Cap1 with a prolonged high balance...Although granted Cap1 is probably more tolerant of prolonged high utilization than many/most lenders, but personally I still wouldn't do it.

If you can get a nice CLI on the Cap1 card then it certainly might be worth it.

[SouthJamaica]

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@mikie209 wrote:

I currently have a CAP1 Rewards card with a $0 balance and a $500 Credit Limit. I  have a permenent 4% interest rate and 4% rate on balance transfers with no fees.

I have another card that has a 16.99 interest rate with about $2500 balance. Should I transfer a small balance (about $400 at a time)  to my CAP1 or should I continue to pay this card and not occur a balance on my CAP1 card?

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It depends on your priority mikie. Is it your priority to help credit score or to save money?

If to save money, then do the BT for $395 at a time.

If to help credit score, then do the BT for $145 at a time.