HELP!- Revolving credit question

Anonymous · ‎06-06-2008

Godd morning, Once again I have a stupid question. I hope I can ask this so you all can understand me. OK, what is revolving credit?? Does this include credit cards or lines of credit or both?? I want to transfer over a line of credit ($5000 @14%) to a credit card with 0% until October 2008. BUT, from what I learned this will hurt my FICO score b/c of debt ratio. What to do??? Hope you understand this!

llecs · ‎06-06-2008

foundthelight wrote:
Godd morning, Once again I have a stupid question. I hope I can ask this so you all can understand me. OK, what is revolving credit?? Does this include credit cards or lines of credit or both?? I want to transfer over a line of credit ($5000 @14%) to a credit card with 0% until October 2008. BUT, from what I learned this will hurt my FICO score b/c of debt ratio. What to do??? Hope you understand this!

No question is stupid, unless you are a brain surgeon asking me what you should do first during an operation.

Anyway, revolving credit is typically CC debt. Car loans, mortgage loans, other loans and most LOCs will fall into installment debt. LOCs can be revolving, but it depends on limit. Some have posted that their HELOC falls into the revolving category. If you were to pull reports from MyFICO for either TU and/or EQ, you may find on pg. 2 or 3 a block or section for overall utilization. You can use that figure to help determine if an LOC is calcuated into that. Also, it may say revolving on your CR.

It could hurt your utilization. Most transfer the other way. I guess it would boil down to economics. If you save $$$ by doing that and you don't mind the temporary score hit, then I'd say do it, so as long as you can transfer it back or pay it off in the future. Utilization hit would depend on your overall CLs.

Anonymous · ‎06-06-2008

Thank you! I just looked on my report and it is under revolving credit. I gues I will have to make the decision if I want my score to drop. Since the interest rate is 0 right now and we are hoping to get this paid off by next year, I think this may be the way to go. Thank you for taking the time to help me out!

Anonymous · ‎06-06-2008

If it does fall under revolving credit, then you don't have a problem. It won't affect your score since its moving from revolving to revolving. The good news is that balance should go done very quickly when its at 0% interest!

Anonymous · ‎06-06-2008

foundthelight wrote:
Thank you! I just looked on my report and it is under revolving credit. I gues I will have to make the decision if I want my score to drop. Since the interest rate is 0 right now and we are hoping to get this paid off by next year, I think this may be the way to go. Thank you for taking the time to help me out!

I am not real experience with CCs so correct me if I am wrong.

When you have a 0% intro offer on your CC, if the balance is not paid when that 0% ends, doesn't it retro-act and charge the new % from the date of the charge until then.

Example-- 0% until Oct 2008, then switches to 22%. June you charge $5000 on the card. Come October, balance is $4000. It goes back to June and charges 22% on the $4000 balance that isn't paid off?

If this is how it works and you aren't planning to pay off the loan until next year and the 0% ends October 2008, would the interest rate beginning October 2008 be less than you are paying on your LOC?

I may be totally wrong because I don't do CCs, just read somewhat about them.

mrlimo · ‎06-06-2008

The other factors in this, what is the c.c. credit limit? If you take $5000.00 and put it on a $5000.00 limit you will be at 100% individual util causing a spike it fiko.

Also if you transfer to the said 0% card, You can basically not use this card again untill the $5000.00 ballance is paid off. Otherwise in the fine print any payment made toward this card will be applied to the remaining ballance with the highest apr first and after that amount is at $0.00 will it start to apply towards the $5000.00

What is the transfer apr once the intro 0% is up?

What is the fee for tranfer ballance on to the card?

With the June Payment you are looking to have 0% for the next 5 months. can you afford the $1000.00 per month to have it paid in full by the end of the promotional 0% rate. If not depending what the default rate jumps to you may be better off keeping it at the current rate.

Anonymous · ‎06-06-2008

The interest rate is 0% until October 2009 (sorry I think I put 08) The transfer charge is $0.00 My credit limit is 15, 000 and if I transfered this my balance would be about 11,000. I know your mouths just dropped to the floor. I do need to look into if the interest is prorated? if not paid off. Thanks again for the advise....I need to do some more research!

mrlimo · ‎06-06-2008

foundthelight wrote:
The interest rate is 0% until October 2009 (sorry I think I put 08) The transfer charge is $0.00 My credit limit is 15, 000 and if I transfered this my balance would be about 11,000. I know your mouths just dropped to the floor. I do need to look into if the interest is prorated? if not paid off. Thanks again for the advise....I need to do some more research!

so till October 2009 is 17 months

you would be transfering $5000 over to this card?

meaning you have a current ballance of $6000 already on the card?

If this is the case it would not be a good idea unless you sock drawer the card away till paid. and take the $11,000 divide it by 17 months and PAY roughly $650.00 a month for the next 17 months. The first 9.5 months of $650.00 payments will be applied to the $6000 ballance with an interest rate. the transfered ballance on $5000 will not have any principle payment applied to it untill the completion of the $6000 ballance is PIF first.

mrlimo · ‎06-06-2008

also you should find out if your line of credit is being reported as instalment or revolving? This makes a huge difference if your keeping an eye on your fico score as well. If your doing it just to save interest money, not as important then.

You will take a huge fico loss if you transfer a installment credit to your revolving credit and takeing the revolving credit to almost 75% util.

Anonymous · ‎06-06-2008

Thanks- ok, the balance is 6000 on the cc. It was a balance transfer as well, so it has the 0% until October 09. I would be transferring over $5000. I called the cc and asked if the interest saved during the trial offer (if balance is not paid in full) would be added to the balance. She said no. It was just the balance as of then. The LOC (not HELOC) is revolving and not installment. But that is the bigger issue here. If I do transfer over the $5000 and it is under the revolving credit (so no new credit), will it hurt my utilization because the credit limit is 15,000 and it would be almost at the max?!?