With a balance on a closed Discover, that means you are paying high interest. Moving the balance to a zero APR will lower cash costs.
There may be some impact depending on how your utilization thresholds are changed, but it is temporary and the cash saved on lower interest is the real benefit.
No stupid questions here
. No, it would actually be better to let that closed card rest at $0. So bt away and try to pay it off as soon as possible if the debt isnt too burdensome imo.
. No, it would actually be better to let that closed card rest at $0. So bt away and try to pay it off as soon as possible if the debt isnt too burdensome imo.
Welcome to myFICO, no question is a dumb question..
to answer your question it probably won’t affect it much becuase the balance will still be reported, just on another card + any transfer fees you incurred.
you MAY be able to get a month or two of leighway depending on how long the new card takes to officially show up on your reports, best wishes
to answer your question it probably won’t affect it much becuase the balance will still be reported, just on another card + any transfer fees you incurred.
you MAY be able to get a month or two of leighway depending on how long the new card takes to officially show up on your reports, best wishes
Balances on closed cards are a little tricky on how they impact you, so let me clear it up.
If there is a balance on the card and the credit limit shows the original credit limit, it counts for utilization the same as an open card until the balance reaches $0. No better, no worse. This is by far the most common way balances on closed cards are handled.
If the limit is reported the same as the balance, that's very bad because the card will still factor in like an open card at 100% utilization until it is completely paid off. Rare, but this "balance chasing" scenario does happen and is the worst case.
If the credit limit is reported as $0, any balance remaining on the card will be excluded from utilization scoring. This would be a best-case scenario unless the amount of available credit between the balance owed and the previous credit line would have lowered your overall utilization across all cards.
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Transferring the balance from your Discover card will likely save you a lot of money. Right now, it is being treated like an open card for scoring purposes (Discover treats them the common way, reporting your balance and previous credit line). Once paid to 0, it will no longer factor in so your total credit lines will be reduced. There may be a small scoring penalty due to elevated utilization on the BT card and overall, but any points lost (if at all) will be gained back as you pay the balance down.
Edit: I should also clarify that this discussion is about FICO scoring. For VantageScores, it'll be different. Having a $5 balance on a closed account would probably do something insane like cause you to drop from a 800 credit score to a 650. Fortunately, they're rarely used for lending purposes.
