High Achiever Wannabe wants to know - Would you BT for 0% or just let it be????

[IsItaGoodSpend]

Back in November, Citi rate jacked us (along with many others!) from 9.9% to 16.99%.  At the time, we had a 3.99% "life of loan" BT we had made.  At 50% UTL, I guess they wanted us to pay off or pay up. Lucky for us another card had just sent a 0% BT offer.  We decided to BT to another card offering 0% until October 09 and sock drawer Citi.

Well, here we are in April and guess who's offering 0% for 12 months? That's right, Citi. 

The delima is, we only have 2 cards with a balance after just paying off a card about 2 weeks ago.  We are trying hard to pay off debt, not move it around.  The cards we do have with balances are at 0% and prime + 0%.  That is why the UTLs are lopsided. 

The question:  Should I BT some of the Chase to Citi to even out the UTL?  If so, what is the highest (in terms of UTL) that I should go?  My thinking was, it may cost me a few dollars now, but save me some in the form of a higher FICO down the road.  Our van is 11 years old and I am not looking for a new one, but at 120K on the OD, if it dies, I want the option of a low interest auto loan.

The data is as follows:

CARD            BAL                  RATE

BoA #1         $0/$27800          12.24%V

BoA #2         $7300/$12600      0% until Oct09, then 9.9% fixed

CapOne        $0/$3000             6.79%L (won't up CL)

CU Visa        $0/$6050             10%fixed

Menards       $0/$7500              20.99%fixed

Chase          $18700/$20700      prime + 0

Citi               $0/$10130             0% offer until April 2010

What would you do High Achievers?  Any thoughts would be greatly appreciated!

[haulingthescoreup]

What's the BT fee, and is it capped?

I think I'd move $5K of the Chase balance over to Citi, if the fee isn't too outrageous, so that the Citi would remain below 50% util. True. the Chase card has a great APR, but it's maxed out, and that's not good for your scores. This would get it down to what, 67% or so. (I'm doing this in my head.) Not great, but better than what it is now.

I don't suppose BofA will let you move $4K (or more) from the $0 balance card to the BT card, would they? That would get you below 50% on that one as well.

You would wind up with three cards with balances, four without, so I don't think you'd get a bad score ding for too many cards with balances.

And then, of course, keep on with the pay, pay, pay thing.

[Anonymous]

I do not recommend that you move your balances.

I agree with Hauling that if you move balances, this will cause FICO decrease due to more accounts with balances.

In addition, by "moving debt around" rather than paying it down, you may flag some AA, such as rate increases or CLD.  By moving portions of your current debt to other cards, you would not improve your total utilization at all, you would increase the number of accounts with a balance and all balances would still be fairly large ($5k plus).

I would leave them alone and just really tighten the belt and budget and pay as fast as possibly.....and make sure payments are much more than minimums.

SUGGESTION:  Many people think I'm funny on this subject, but I recommend that you have a "Spring Cleaning" Garage sale and Ebay sale.  We all have stuff that we accumulate that we don't need, don't use, don't want, don't remember we have, stored till thrown out, a luxury that can really do without or worse yet we are paying storage fees on.  Many people raise from several hundred to several thousand dollars this way....cleaning out the closets, garages, storage units, attics and other places of accumulation, etc.  Then apply these funds to your balances.

I think that if you can make big dents and consistent, timely payments that are far greater than min, you will be fine and get the best results for FICO.

[Anonymous]

Get your debt off of your report by doing a BT to a business card like Juniper bankatlantic or Advanta. I believe both still have 0% offers with a low max BT fee.

[Anonymous]

That would require a CL greater than $26k to get it completely moved.  But if you do get a Biz Card, most do not personally report, so moving portions to this type of card could help "mask" the debt.  Just don't run the personal cards up again once you move it, if you try that route.

You hadn't mentioned what kind of payments your are currently making toward the debt....how long at current pace do you anticipate till you can pay it off?

[dizzier]

Listen to HTSU, she knows what she is talking about!

My scores are being held down by having "too many accounts with balances." The awful thing is that only 1 of my 4 CCs have a balance, but my credit reports are 2-3 months behind my actual balances. This makes it look like all my cards are currently in use. *sigh*

I try to rotate my card use and look where it gets me .... *grumble, grumble*

[IsItaGoodSpend]

HTSU, Thanks for the reply! 

The BT fee is 3% with no cap.

As far as BoA is concerned, I'm already at 58% UTL there (trying to get that under 50% by next month).  My 0% with them is until October, so I am focusing on that one the most right now since anything unpaid will jump to 9.9% as opposed to remaining at prime (purchase rate) on Chase.  then I'll only have the one card to paydown with the snowball method.

I thought if i just moved between 15%-30% of the TL of Citi, it would bring me under the maxed out with Chase.  I am fearful of moving too much and getting a CLD from Chase.

[IsItaGoodSpend]

txjohn-

I don't think opening another card is the anwer for us. 

We just divided our large BoA up in July in order to get a lower rate, so our AA went down and I don't want to take a hard inq when we don't need or want any other cards.

As far as payments, min on Chase is around $375, but we pay at lease $400, sometimes $600.  The min on BoA is 1%, but we've been paying 2x per month.  Once just before the statement ($750) and $400 after the statement.  By next month, our heating bill will be waayyy lower that it has been and school year expences will be coming to and end for a few months.  We plan to use that extra as well.

[Anonymous]

As I originally posted, I don't think moving the debt is the best strategy.  You don't want to increase the number of balances on your existing accounts, this affects your FICO negatively.  And since you would not be decreasing your total percentage of utilization, it isn't going to help much in any sense.

And, by posting another sizeable balance on a separate card, you run the risk of appearing financially distressed which could effect an AA by any of your CCC's.

And, even if you did get a biz card or two to move some of the debt "off the radar," the inquiries will show up which signals that you are shopping credit.  And, when you have high balances on existing accounts and begin shopping more of the same type of credit, this signals:  "HELP, I'm in trouble..."  and you may come under AA.

Finding ways to pay them down as fast as possible, I believe, is the best way to go.  And this is why I suggested the Spring Clean Garage Sale and Ebay fest.....dump some stuff you don't need, pick up some extra cash and pay, pay, pay.

If anyone can pick up a temporary part time job.....I would do it.  Ideally you would be paying 4-5x minimums to really show that you can handle the level of debt you have.

CCC's don't look at revolving debt the same way as an installment loan....when you make set payments for longer periods of time, they may decide to CLD.  Why?  Because your finances may change over the course of time and then you have a balance that you may not be able to pay.   CCC's are really designed for "revolving use" up to a limit, for limited periods of time.  When you need fixed payments for longer periods, installment loans are designed for that purpose.

Message Edited by txjohn on 04-09-2009 06:36 AM

[IsItaGoodSpend]

Thank you all for your replys!

I think after working so hard to get down to just two cards, we'll just let it be.  I think having a third account open (after we just got rid of a third account) may not look good to the CCC's.  It may also be emotionally deflating after feeling the accomplishments of months past. 

I haven't spent much time researching Chase on the forums, but they have always treated us very well.  The CL was originally with another bank that decided to sell off the accounts to Chase.  They honored our rate, CL and the originall opening date.  Also, I don't want to trigger another rate jack, or worse, a CLD.  We'll focus on Chase until we can get some breathing room there.

I appreciate your help.   Your knowledge and experience has made me think of my debt from the outside looking in.

Cheers!