Question about a balance transfer

Anonymous · ‎07-26-2016

First of all, thanks to all the contributors on this site. I have progressed so much with correcting credit score mistakes I made due the material on this forum.

Question:

Does a credit card company hold it against you if you transfer a balance to take advantage of the other credit cards 0% interest rate? Or is it really not that big of a deal?

dragontears · ‎07-26-2016

Generally not that big of a deal to the card with the balance being transferred away (there are some theorys that state otherwise but AA is most frequently seen when people have high utilization on a card from BT to that card and the card where the BT came from is fine). This is a general observation and (of course ) doesn't apply to every situation

takeshi74 · ‎07-27-2016

@Anonymous wrote:
Does a credit card company hold it against you if you transfer a balance to take advantage of the other credit cards 0% interest rate? Or is it really not that big of a deal?

What really matters in this context is Revolving Utilization. Consider what the Revolving Utilization on both cards would be before and after and realize that until both report the updated balances that you may have the balance reporting on both for a short period.

A BT from the card with the balance is essentially a payment to the creditor. A creditor isn't going to hold paying them against you. However, if the Revolving Utilization on the card being transferred to is significantly increased that could be a concern to any creditor reviewing your reports.

Anonymous · ‎07-27-2016

The ugly thing about balance transfers is sometime both creditors report the balance so lender C sees much higher util until the dust settles.

Anonymous · ‎07-27-2016

In hindsight I guess the real question I am trying to ask is, does utilization flow across total credit of all cards or per card? In other words, if I have 70% utilization on one card, but 5% on three other cards do I get hit with 70% on score or the combined total credit utilization of all cards?

If that makes sense? Sorry I'm new to this.

Thanks for the responses.

Anonymous · ‎07-27-2016

@Anonymous wrote:
In hindsight I guess the real question I am trying to ask is, does utilization flow across total credit of all cards or per card? In other words, if I have 70% utilization on one card, but 5% on three other cards do I get hit with 70% on score or the combined total credit utilization of all cards?

If that makes sense? Sorry I'm new to this.

Thanks for the responses.

They both have an effect - FICO scoring involves both total utilization and utilization per trade line. So both your OVERALL percentage of debt to available credit, and that same percentage per card has an effect. I believe the tiers are 10%/30%/50%/80%. They're also referred to as 'utilzation buckets".

SunriseEarth · ‎07-27-2016

I BTed a balance from Discover to BoA, and I was able to get my largest CLI to date on my Discover not long after that. Honestly, I think lenders just like getting paid, be it from a BT or from your own bank account.

Anonymous · ‎07-30-2016

@Anonymous wrote:
The ugly thing about balance transfers is sometime both creditors report the balance so lender C sees much higher util until the dust settles.

You can avoid this from happening if you plan your BTs based on reporting dates.