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Hello,
So I recently got approved for my first unsecured card with a $2000 credit limit (also my first unsecured non-store card so far)
I have two secure cards, both with $400 limits, and both of which are maxed out because of recent car repairs. I also have an $80 balance on a gas credit card that I intend to pay off next week. Anyway, I was recently considering consolidating the debt from the two $400 cards onto the new unsecured card, and I was just wondering if this was a good idea. My thinking is that then I could keep the other two cards completely zeroed out, and only have to worry about one credit card bill per month. Furthermore, instead of having two cards with 100% util, those two cards would go to 0% and the new card would only be at around 42% after the transfer and finance fee. As well, one of the secured cards (a Wells Fargo card) is set to graduate at the end of next month, and I feel like I'd be more likely to be approved for a graduation if the card isn't maxed out. The interest on the B of A secured card is 20.24%, while the interest on both the Wells Fargo card and my new card (A CitiForward college card) is 18.99%. Like I said, I plan to fully pay down the $800 plus the 4% transfer fee within 5 or 6 months. Would a balance transfer be a reasonable idea in this case? I'd really appreciate any help!
Thank you so much for your help! I just had one more quick question. I just checked my Wells Fargo account and it says that my interest rate is actually 22.99%, and not 18.99% like I originally thought. I was just wondering if that has any effect on the advice that you gave me, or if you believe I should still follow the course of action you originally recommended?
Thank you!
@cowphin wrote:Thank you so much for your help! I just had one more quick question. I just checked my Wells Fargo account and it says that my interest rate is actually 22.99%, and not 18.99% like I originally thought. I was just wondering if that has any effect on the advice that you gave me, or if you believe I should still follow the course of action you originally recommended?
Thank you!
Honestly, it doesn't change anything in terms of my advice. Your interest savings per month would still be well under $1.00, so you would need to carry a balance for over a year in order for it to be worth it. I would truly hope that you can get this all paid down sooner than that.
Good Luck! And remember that the sooner you pay this down the more money you save and the better your credit score will be.