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Consolidation / AMEX / Chase / Navy & Pen Fed Strategy

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Anonymous
Not applicable

Consolidation / AMEX / Chase / Navy & Pen Fed Strategy

Long time lurker here.  Have appreciated reading through lots of great information from these forums.   Have recently learned some lessons on utilization and why carrying a balance especially with AMEX POT is expensive.

 

I just paid a couple of the balances on the non-AMEX cards to get overall utilization down to exactly 28.2%.  My plan as soon my TU and other scores pop is to apply for cards at Navy and PenFed to hopefully be able to move some of the high interest balances over.

 

I am trying to minimize the interest payments as much as possible to make a bigger dent each month in the balances owed.

 

I know the AMEX cards don’t impact utilization so once I balance transfer them over I will have to deal with that.   I have learned my lesson on closing AMEX accounts and Pay Over Time. 

 

My current non-updated scores are as follows:

 

Experian Fico 8: 736, oldest account 16.3 years, no late payments or collections ever, 5 open (two from utilities from boost) accounts. 3 credit checks. 

EQ Fico 8: 730

TU Fico 8: 712.  Note VantageScore 3 is showing 686 which is based end of October balances. 1 inquiry last two years.

 

     AnnualMonthly
 BalanceLimitUtilAPRInterestInterest
Apple Card1,465550026.644%21.99%322.2526.85
Chase Sapphire12,56820,20062.219%19.99%2512.39209.37
Chase Slate024,0000.000%10.24%  
Subtotal14,03449,70028.237% 2834.64236.22
       
AMEX Plat Biz7,5008900 29.24%2193.00182.75
AMEX Cash Back Biz1,8822000 17.24%324.4627.04
 9,38210900  2517.46209.79
Closed      
AMEX Plat6,000  15.24%914.4076.20
AMEX Gold40,000  15.24%6096.00508.00
AMEX Blue Biz1,000  11.24%112.409.37
 47,000   7122.80593.57
       
Grand Total70,416   12,4751,040

 

Does seem like the right approach?   I understand my first card with Navy might be a low balance so I was thinking of saving their balance transfer card for the 2nd application.  

 

Are there any other ideas anyone would recommend?   Thank you.

8 REPLIES 8
AllZero
Mega Contributor

Re: Consolidation / AMEX / Chase / Navy & Pen Fed Strategy

It is my understanding your reported personal AmEx balance on the charge cards is still factored into your aggregate utilization.

 

Are you a member of Navy or PenFed?

If not, have you considered joining now before the credit application?

If yes, great.

Message 2 of 9
Anonymous
Not applicable

Re: Consolidation / AMEX / Chase / Navy & Pen Fed Strategy

Amex offers FRP (Financial Relief Program), which may heavily reduce your interest rates. It's a good alternative to, or way to bridge the gap in BT / low interest funding.

 

 You may check out your options online or by calling. If no FRP available, do ask if there are other ways they may be able to assist you, and they may have something.

Message 3 of 9
dogmeat
Regular Contributor

Re: Consolidation / AMEX / Chase / Navy & Pen Fed Strategy

I think you have a pretty good plan. The only thing left out is income, but assuming that's good, with your already high limits and long history I think there's a good chance you could score some 15-20k+ limits with those CUs. A couple things I can think of:

 

1) You've got about 61k personal debt, and if you were to distribute that to other cards at ~50% util per card, that'd require about 120k in CLs.  You already have 24k available on the Slate, so ~96k remaining.  Given that, if you want to go all-in on the CC BT technique to reduce your debt, I think you should be more aggressive on new CU CC apps - maybe app for 5, hope for 20k each.  This is not a common suggestion and I don't think everyone will agree with this (whether in principal or based on "economic conditions"), but I suggest it because it seems your profile supports it.

 

The reason I mention 50% util is because once you go much over that, in my experience your prospects for getting new credit decline.  You should, of course, use as much of your CLs as you can to save interest, but once you go there, you're committed to working with the CLs you have until those balances come down.  That's another reason why I think it makes sense to go "all in" with the apps now, because you'll likely end up BTing into some high-util balances, and as such you'll want to cool off for a year as you pay those balances down.

 

Some anecdotes: Alliant CU gave me 20k when I had inappropriate levels of util - I provided plenty of documentation, and they came through (they also send me regular 12mo 0% APR 2% fee BT checks).  There are other big CUs: State Department, Affinity, and almost certainly some local ones in your specific geographic area. One of my state's employees CUs told me over the phone, "Well, you've been approved for the entire 50k credit line, how much would you like?" when I applied for their CC with 10% < aggregate util < 30%.

 

2) I'd try to get at least one card with a permanent 0% BT fee and low APR.  Like a 6.99-7.49 range card, if possible.  That way, when you want to shuffle these BT balances around towards the end of their promotional periods, you'll have a no-fee and low-interest way to do that.  The other example would be moving between your CSP and Slate, for example, if that ever made sense.  You temporarily BT it over to the no-fee card.  One or two weeks of that low APR is a fraction of a percent in interest, much less than any BT fee you might pay.  PenFed Promise is a great card for that, as they have an ongoing 4.9% APR / 0% BT fee offer, and there are others.

 

3) It's worth at least checking for a personal loan qualification. If you could score something in the sub-10% APR that'd be a pretty big win and would be a lot less complicated.

Message 4 of 9
Anonymous
Not applicable

Re: Consolidation / AMEX / Chase / Navy & Pen Fed Strategy

Thanks for the quick and thoughtful responses.   A couple of comments - def don't want to get into financial hardship program with AMEX as that would harm my standing with them.   I looked into it and of course, they offer it but once I pay off the balances i am going to re-instate my gold card with them.

 

I am an approved member for Navy and PenFed, just waiting on the updated FICO scores to unlock my reports and apply for their cards.

 

For the CU app spree I should apply for all them on the same day?   I'll look into Alliant, State Department, and Affinity...  

 

 

Message 5 of 9
Anonymous
Not applicable

Re: Consolidation / AMEX / Chase / Navy & Pen Fed Strategy


@Anonymous wrote:

Thanks for the quick and thoughtful responses.   A couple of comments - def don't want to get into financial hardship program with AMEX as that would harm my standing with them.   I looked into it and of course, they offer it but once I pay off the balances i am going to re-instate my gold card with them.

 

I am an approved member for Navy and PenFed, just waiting on the updated FICO scores to unlock my reports and apply for their cards.

 

For the CU app spree I should apply for all them on the same day?   I'll look into Alliant, State Department, and Affinity...  

 

 


I find it illogical to pay ~10K annual interest to them to preserve an arbitrary standing which may or may not even still exist considering the current state of your accounts

 

I don't think they pay enough rewards or benefits to make it worth paying that much interest in exchange, at least at most income levels (and if you make more than that, paying them off wouldn't be an issue), JMHO

 

Could do the FRP, then wait a year with your balances low again, and return to them in a much better state

Message 6 of 9
Anonymous
Not applicable

Re: Consolidation / AMEX / Chase / Navy & Pen Fed Strategy

the interest i am paying AMEX on POT is the most painful of all!  I think you are right, I should see how things land with the CUs and if I large balance I can't move off I should ask them what can be done on those interest rates.   I am sure my standing is not great with them right now anyways with those balances as they told me no more cards last year until the balance on the Gold card is paid in full.  

 

Message 7 of 9
dogmeat
Regular Contributor

Re: Consolidation / AMEX / Chase / Navy & Pen Fed Strategy


For the CU app spree I should apply for all them on the same day?   I'll look into Alliant, State Department, and Affinity...  


 I might do a 2-3 a day, one or two days apart.  I don't think there's any harm in doing them all in the same day, but I don't think it's necessary, and would probably require more coordination.

 

Another thought:  If you're under 5/24, you could make your first app for a Chase Freedom.  Even if they only approve you for $500, you can likely (and easily, no HP) move the bulk of the Slate CL over to it, and use that new combined CL for BTs at the promotional rate (assuming the Slate is at least one year old).

 

ETA: Worth checking out Discover prequal as well.  No guarantee of a big CL to start but they do grow and they do offer low/no-APR promotions annually upon request.

 

Message 8 of 9
Remedios
Credit Mentor

Re: Consolidation / AMEX / Chase / Navy & Pen Fed Strategy

Don't want to be a party doodooer, but even if Fico excludes charge cards from utilization calculations, lenders do not.

Most credit unions are very sensitive towards DTI, and yours must be through the roof based on interest payments only. 

You have over $70,000.00 in debt, and I really don't see you being approved for enough cards to accommodate even the fraction of your debt. 

 

Chase suggestion will not work. You're carrying high balance for prolonged period of time, and I'm surprised they haven't leaned towards CLD yet.

I wouldn't poke that bear. 

 

Realistically, you should talk to Amex and see what kind of program is available to you. 

At least you might be able to stop accumulating interest while you look for possible solutions. 

Your open cards with them are maxed, there is nothing for them to CLD.

If you are worried hardship program will damage your "relationship", that damage is already there. 

Even if you're approved for a card or two, brunt of that debt will stay with you. 

BKs are filled for a lot less than 70,000.00.  

 

 

 

Message 9 of 9
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