To balance transfer, or not balance transfer?

[Anonymous]

Long time lurker, first time poster....the amount of knowledge I’ve gained here has proven invaluable!

Up until six months ago, I never cared about my credit. With scores in the low 600s, I only cared that I could finance a car, or have few a piddly high-interest credit cards: Credit one 300/1500 and 800/1500, Merrick 1800/2200, Cap 1 QS 1000/1500 and Care 0/500.

Last month, with FICO 8s of EX 676 EQ 661 and TU 677, and a recently paid Verizon collection account (my last remaining derogatory tradeline), I read an encouraging thread here and applied for a Discover It Chrome while laying in bed at midnight between levels of Toon Blast, and got one helluva a surprise: an approval with a $6,000 SL!

“HOLY $&@%!”

Currently, I’m pretty proud that my EX 8 is at 695.....doors are starting to open. That auto loan that I’ve been thinking about taking out instead of being at 8% is now looking closer to 5 or 4%. Strengthening my credit is now a hobby....

My question is this: I currently have around $3900 in balances (total $13,150 CL, around 30% UTI) on all my initially mentioned accounts, besides taking advantage of the 14 month 0% balance transfer promo with Discover, is there anything else to gain score wise by transferring all my balances to the new Discover card?

[AllZero]

Finances over FICO.

BT pros:
Saving money 💰 on interest.
Zero out your high interest APR % cards.
Fico score boost by reducing 50% of cards reporting a balance
Another score boost for reducing individual utilization, one was near maxed out 82%

Cons:
Tempory score penalty for 3900/6000, 65% discover utilization.

[Anonymous]

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@AllZero wrote:
Finances over FICO.

BT pros:
Saving money 💰 on interest.
Zero out your high interest APR % cards.
Fico score boost by reducing 50% of cards reporting a balance
Another score boost for reducing individual utilization, one was near maxed out 82%

Cons:
Tempory score penalty for 3900/6000, 65% discover utilization.

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There would actually be score gain, not penalty. Merrick card is at 82% and essentially maxed out for scoring purposes. 

[AllZero]

^ That was the only negative I thought of for the Cons field if we were to consider trying to fully optimize score.

So there will be some positive and negative points. Overall, it will net a score gain.

[Anonymous]

If you see yourself carrying those balance for a while (more than a few months), yeah, transfer them.

[AverageJoesCredit]

Carrying a balance with Disco may actually help you get a biiger cli down the road. Its not gaurenteed but its one thing ive noticed seems to help those who have gotten big cli , ymmv of course

[Anonymous]

I say do it. Just be sure not to run up balances on the other cards again. I did a BT to my Disco It card when I opened it, and have gotten a few nice CLIs

[tcbofade]

A) Dollars are more important than Fico scores.

B) As already mentioned, you'll probably see a Fico BOOST after all of your cards update.

Do the balance transfers.

[Anonymous]

Clearly unanimous!

I’ve whittled Merrick down to 1400, roughly 66% UTI, but the BT will save me around another $100 a month in interest, just wanted to make sure there wouldn’t be a offset by carrying a high balance than I’ve ever had. Currently reducing revolving debt around $400/month so progress is being made!

Thanks for all your insights!

[Anonymous]

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@Anonymous wrote:
Clearly unanimous!

I’ve whittled Merrick down to 1400, roughly 66% UTI, but the BT will save me around another $100 a month in interest, just wanted to make sure there wouldn’t be a offset by carrying a high balance than I’ve ever had. Currently reducing revolving debt around $400/month so progress is being made!

Thanks for all your insights!

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$400/mo w/ 0% being added monthly makes a lot of sense considering your current cards are obviously charging north of 20% or even 25%.  first month savings makes up for the BT fee.

Then we have to talk about the transition after things get paid down.....

Credit one 300/1500 and 800/1500,

Merrick 1800/2200,

Cap 1 QS 1000/1500 

Care 0/500.

Disco $6000

So, you need to kill those 3 cards when the BT goes through.  When the BT pays them off but before Disco reports a balance... you'll have a small window to pick up 1 more CC ro replace the 3 you're cutting.  Your scores probably won't be updating in this window though either since there's a lag between payoff and reporting.

Disco will give you 0% on purchases/BT's for XX months but, the goal is to just payoff things on 0% w/o adding to it.

Picking up a spend card that's PIF only each month would be the goal here to balance things out and generate growth down the line having 4 cards to be able to rotate through to max your potential points w/o killing your UTIL and other factors like # of cards w/ balance.  Since you mentioned EX in your OP I would probably take a look at Amex as you're right on the cusp of an awesome approval scorewise but, not in too mjuch danger of a denial.

https://www.americanexpress.com/us/credit-cards/?category=all  Check here incognito mode and see what looks appealing.... I would probably aim for BCE/ED cards w/ $0 AF attached to them