Is this balance transfer tactic shady?

[Anonymous]

Is it fraudulent, shady, or illegal to do a balance transfer of a large balance to a new card and then apply for a second harder to get new credit card after old card updates to $0 but first new card isn't reporting? Very easy to pull off if you time the balance transfer ~2 weeks before your statement date on the old card. Most new cards take 3-6 weeks to report. So there will be a window where some of your debt just "vanished" which will undoubtedly boost your score potentially high enough to get a hard to get card. 

This seems wrong to me but I'm sure people have done it. Will banks have serious issue with you once the other card with the BT shows up on reports or is this just part of the game?

[AverageJoesCredit]

I dont think so . You are applying for credit, nothing shady there. The transfer balance will appear again and you still have to pay it. Heck sometimes one does a bt and you get both old and new reporting at same time, as happened to me. Makes it look like you got double debt. But utilization has no memory. Unless you are lying on your applications or applying in someone elses name or sanz permission, i think you are ok.

[Remedios]

It's not shady but the only concern I'd have is if your new lender happens to be of the more touchy kind, you get approved, then a big balance shows up.

Nothing shady about timing BTs in a way that benefits you, though.

[Anonymous]

Thanks for the input. I'll see if timing works out and might pull the trigger depending on how the chips fall. Would love to grab the hilton honors but woudln't feel comfortable using a HP unless my Experian F8 was at least 650. Possible if my utilization drops to 0% but we'll have to see. Sounds like the ethics of it are okay though.

[M_Smart007]

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@Anonymous wrote:

Is it fraudulent, shady, or illegal to do a balance transfer of a large balance to a new card and then apply for a second harder to get new credit card after old card updates to $0 but first new card isn't reporting? Very easy to pull off if you time the balance transfer ~2 weeks before your statement date on the old card. Most new cards take 3-6 weeks to report. So there will be a window where some of your debt just "vanished" which will undoubtedly boost your score potentially high enough to get a hard to get card. 

This seems wrong to me but I'm sure people have done it. Will banks have serious issue with you once the other card with the BT shows up on reports or is this just part of the game?

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Not shady at all, Play those cards right 

Just be careful of high Util. on the BT. Some lenders could care less, other's freak out. Just depends on which lender ..IMO

[Anonymous]

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@Anonymous wrote:

Will banks have serious issue with you once the other card with the BT shows up on reports or is this just part of the game?

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Probably not, unless your scores are borderline for approval or the balance materially changes how they'd look at your debt/income. It's not likely to matter if the amount is small relative to your income. But, if you're "hiding" $10k of debt on a $20k- 30k income then I can understand why they may look again.

Most major banks do a soft inquiry check a few weeks or month after your approval and then on an ongoing basis. They reserve the right, according to the application terms, to rescind the offer. Or, if you have multiple cards with them it could lock out your other cards with them as well. We'd need more info to give more specific advice.

[Bankrupt2019]

I feel like this may be more common than you might think.

[Anonymous]

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@Bankrupt2019 wrote:
I feel like this may be more common than you might think.

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Totally agree. When I first thought of it I said to myself, "I wonder how many people purposefully do this because it seems too easy."

[CreditInspired]

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@AverageJoesCredit wrote:
I dont think so . You are applying for credit, nothing shady there. The transfer balance will appear again and you still have to pay it. Heck sometimes one does a bt and you get both old and new reporting at same time, as happened to me. Makes it look like you got double debt. But utilization has no memory. Unless you are lying on your applications or applying in someone elses name or sanz permission, i think you are ok.

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AJC is correct and this is exactly what happened to me on my Miss Disco BT. The BT showed up almost immeduately on CRs and it took about 5-7 days for the 3 accounts I paid off to show a $0 balance. So I lost between 7-10 points on CRs but gained them all back and some extra points because now I had 3 less cards reporting a balance. 

[Anonymous]

While there is nothing wrong or shady with doing this, I would caution anyone who doesn't have a strong profile from making waves.

What can easily be given, can easily be taken.