What Does This Response Mean re: Application for a card with a requested Balance Transfer?

[Anne1208]

Hey!

So i've never done a balance transfer before but I have three credit cards, 2 with no balance and one with 12,000.  I just applied last night for a Discovert It card, and put in the info for a balance transfer of $12,000 and put in the account number for the Visa and all that.  I went through the rest of the application and hit submit and it said I was approved and would recievestuff in a few days.  It also said "click here" for your credit line, so I did that and it told me I got a credit line of like, $5000.

What does that mean? Does it mean I got the balance transfer of $12k plus the 3% fee, and then a $5k line, or $5k TOTAL and so not really any credit to transfer the whole balance? I am so confused! I really didn't want this card unless I could transfer the full balance for no interest and just paying the 3% fee.

Thank you in advance for any insight

[Anonymous]

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@Anne1208 wrote:

Hey!

So i've never done a balance transfer before but I have three credit cards, 2 with no balance and one with 12,000.  I just applied last night for a Discovert It card, and put in the info for a balance transfer of $12,000 and put in the account number for the Visa and all that.  I went through the rest of the application and hit submit and it said I was approved and would recievestuff in a few days.  It also said "click here" for your credit line, so I did that and it told me I got a credit line of like, $5000.

What does that mean? Does it mean I got the balance transfer of $12k plus the 3% fee, and then a $5k line, or $5k TOTAL and so not really any credit to transfer the whole balance? I am so confused! I really didn't want this card unless I could transfer the full balance for no interest and just paying the 3% fee.

Thank you in advance for any insight

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Unfortunately I think you'll find that the limit you have received is $5K, not the $12K you desired.  While card companies will ask you how much you want to transfer ahead of time, there is no guarantee that they will give you a high enough limit.  Now, you have a choice to make.  Keep the card and use it for a year to take advantage of the double cash back terms or close the card once you receive it.  If you do the latter, the damage of anew application and card has already been done so I would suggest just keeping the card.  I think, depending on your income and limits that you have on other cards, that you will have a hard time finding a card that will give you the option to BT $12K right from the start.  

[K-in-Boston]

I had the same issue in June.  Put in for a $16,000 BT and Discover started me lower.  Note that they will still be processing the BT, just not for the full $12,000 you asked for.  It will probably be somewhere around $4,000 + the 3% fee.  If you are concerned about the utilization hit, you should contact them to cancel the BT.  Personally, I would keep the BT as is since saving money on interest is so much better than losing a few points temporarily.  The it card will grow fast (Request a Credit Line Increase can be hit whenever you feel like it and is a soft pull - I do it like once a month) as long as you make regular on-time payments and don't have anything negative going on elsewhere.  One of the things I love most about Discover is that their BT offers stay available on your account all the time, and they are generally flexible with a choice of 0% + 3% fee for 12 months or 4.99% + 0% fee for 18 months.  For someone who is playing the long game with BTs like me, they are wonderful!

[Anne1208]

Thanks for the input! I think I will take whatever 0% BT I can get right now - even that much will save me $100 a month in interest. We had 0 credit card debt 12 months ago, but between being first time homebuyers and having a baby we had a LOT of extra expenses...so this was a one-time thing and we've been paying it down.

I will take the hit to my credit re: utilization as this card is only in my name and I can afford to take a hit to save some money.  In the next few years the only credit thing we will need is to buy a car, which we will do in my husband's name since we are keeping his credit as clean as possible while we deal with this year's expenses on my credit. 

Thank you also for the info on the ongoing BT ability...We have been paying about $750/month to this card so that will help a lot to have that the next few months.

[K-in-Boston]

Oh, the home purchase and baby the same year is quite familiar.  Congrats!  You didn't mention what the limit was on the card with the $12k balance, but you likely won't see a huge score change and even then it's just temporary.  As long as you aren't adding new debt, the additional credit line should hopefully balance out the high util on the Discover, the HP for applying and the ding for a new account.

[Anne1208]

Thank you!  

The credit line on the Visa is I believe $16k or $18k.  We haven't been using the credit cards the past 3-4 months, only paying them down and otherwise back to living within our means.  The stream of huge expenses is over for now (i think)! We intend to continue to do that and get back to getting rid of the credit card balances.  I have like, a netflix or other small charge on autopay on each of them to keep some activity going, but that's it. 

[austinguy907]

Congrats on the approval with Disco!  That's usually the hardest part of the relationship.  I have a thread in my signature for them both on my first year with them and some additional info we've been gathering for awhile now.  Disco is a great tool to have in your wallet and will grow significantly.  You're already doing the right things with the autopay and small charges to keep things active.  The most important thing is to keep things active to push lenders to give you a little more spending ability periodically.  Yes, houses and babies equal money pits when you first start out

Thinking about this a little more though I'm sure you could probably pick up an AMEX for the other half of the BT you want at 0%.  I would go with the BCE or ED cards as they both have 0% periods on them usually for 12 months.  Amex is known for quick growth as well and help get your scores back up from the util decrease currently.  Just a thought if you don't have one already.