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Trading balances between cards?

Your FICO® Scores can impact your loan interest rates, terms, approvals and more.
Member

Trading balances between cards?

This is my first time on this board, and mostly I'm able to figure out what I want to do credit-wise on my own, but advice from more experienced parties never hurts.

 

My credit is good, at around 731 according to my Discover account. I have done the balance shuffle quite a bit in the past and I'm about to do it again. My Discover and my Bank of America both reached the end of the promotional period for 0%, and I want to trade balances. I've done it before to a point, but I never hear of people doing this. Instead I always hear of people opening a new card to transfer a balance. That doesn't make sense to me considering I always have offers available from Discover and BoA for balance transfers.

 

BoA I'm using $3.3k of $10k available.

Discover I'm using $4.3k of $14.5k available.

 

So my plan is to transfer BoA to Discover for 0%, and then transfer $3.3k from Discover to BoA for 0%. Since my BoA has a lower limit, I don't want to transfer all of Discover since it would increase my utilization percentage too much on BoA.

 

I have all that figured out, but my concern is that I'm currently house shopping and I've been preapproved already, but I may have to get preapproved by a different lender in the very near future due to my current one not offering financing for a house we're currently looking at. Nothing is concrete, but I don't want this balance shuffle to put any kind of negative dent in my mortgage process. I don't THINK it should make a difference, as the spike in my utilization will last for a couple days at most, but you never know...

 

Should I wait, or should I do the shuffle now?

Message 1 of 7
6 REPLIES 6
Community Leader
Super Contributor

Re: Trading balances between cards?

Welcome to the forums!
Have you requested CLIs on both cards?
If not, that's why some of us get other cards in order not to show 30% or higher utilization.

I wouldn't drop a $4.3k balance on a $10k CC unless it was a hidden trade-line.
Either wait until after you lock in your mortgage or get those credit limits up enough to keep you below the 30% threshold.

Both are SP increase request. So I would start there.
Message 2 of 7
Super Contributor

Re: Trading balances between cards?

Welcome to the forums.

First, if you have a mortgage app coming up I would leave the balances where they are. Asking for SP CLI is an excellent next step. Paying a bit of interest until the mortgage is funded will make that process smoother.

When doing balance shuffles, it is advisable to have a third card available with no fee. You really should clear off one balance completely so you know that card goes to zero balance. This is the ideal but not necessarily available. What are your other cards and their balances, limits?

You can swap balances as you say, though you will probably end up with a portion of what you just paid a fee, the net zero rate, being transferred back to the other card. In other words a remainder at full APR is likely on each card. This is not the end of the world. Just pay those portions sooner.

More importantly do you have a plan for paying these off? Shuffling balances should be a temporary tactic.
High Bal Jan 2009 $116k on $146k limits 80% Util.
Oct 2014 $46k on $127k 36% util EQ 722 TU 727 EX 727
April 2018 $18k on $344k 5% util EQ 806 TU 810 EX 812
Jan 2019 $7.6k on $360k EQ 832 TU 839 EX 831
Message 3 of 7
Member

Re: Trading balances between cards?

I haven't requested one too recently from Discover, but I did get one given to me not long ago from BoA. Usually BoA won't do an increase without potentially doing a hard pull, so that's why I don't usually ask them for one.

 

Additionally, I wasn't going to put the full balance from Discover onto BoA specifically because of the utilization.I was going to only put $3.3k, which would mean I'd still be charged interest on about $1.1k, but it wouldn't alter my utilization.

Message 4 of 7
Regular Contributor

Re: Trading balances between cards?

I agree with earlier point to prioritize getting and closing on mortgage over having to pay interest on credit card accounts in the short-term.

A related issue to be aware of is timing of how transfer and payments hit cards.

You could have a period where a transferred balance shows up on account the balance was transfered to but does not yet show up as paid on account it was transfered from yet.

The various members of this board can make suggestions on how to minimize the chance of that, but I am going to short-circuit that explanation to say worry about the mortgage first if it is within next few months.

Message 5 of 7
Member

Re: Trading balances between cards?

Hmm, I'll have to look into getting a SP CLI, because I was almost sure it was "if you click yes you give us the right to pull your credit...etc" and that it'd be a hard pull. 

 

My only other available card is my Chase card, which hasn't seen a CLI at all. It's still at the original available balance of $2.8k, and of that I owe $678, so there isn't much wiggle room. I know I need to call them about doing a CLI, but I've been putting it off with that card being so close to being paid off.

 

And yes, I will have a portion still left on the Discover card that will be accruing interest, but I can handle that if necessary. I don't make a lot of money at my job(and I can't get a new job until after we get a house), so I do struggle sometimes with getting this stuff paid down, but I try to pay at least $200-$300 above minimum each month. The shuffle is out of necessity, but I'm doing my best to get this stuff paid off.

 

My original plan, which was put on hold for a couple of months due to the holidays, was to focus on the card with the lowest balance first and put all my extra money on it and get it paid off. Then if necessary do a balance transfer, or if unnecessary, move to the next card with the next lowest balance and systematically take out the cards one by one.

 

I'd also like to add that we haven't actually found a house yet. We're going to look at one today, but it's definitely no guarantee. We've been looking since the summer and haven't had much luck, so we're still hunting.

Message 6 of 7
Community Leader
Super Contributor

Re: Trading balances between cards?

Take your time with the house hunting, don't rush it. Make sure you get what you're looking for, don't settle.

There's a thread here about BofA changing to SPs for CLIs.
It's been that way for more than 6 months now.
It is in fact a SP. When and if you do your request. Shoot for the stars! If you want $25k.. asked for it. The system will counter offer, if you're not pre-qualified for the requested limit.
Message 7 of 7