Seeking advice on how to improve credit when utilization is high

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thank you @FinStar !

[RobynJ]

I'm glad I joined these forums. I am learning so much about credit that I had no idea about. I did research a few cards and found the upgrade triple visa that seems that might be a good play for this situation. It seems that they give you a decent CL and set it up similar to a loan so that the total balance is paid in 60 months. From what I read this might be a good choice in a situation such as posted here. Once again I am not even close to knowing as much as most of the members here but from what I read this sound like a possible solution.  

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I was surprised today to get in the mail an "invitation" (not preapproval) for the FNBO Maximum Rewards Visa card.

Apparently since I signed up for a waitlist for a FNBO business CC, for some reason they sent me an offer for this *personal* CC.

It's 0% APR through June 2023, then 15.99-23.99 (so I would only be using it for the BT).

No annual fee, 1% cash back (though I don't really care about cash back--that's not my focus).

So, in a few months I should be eligible for a 2nd loan through Upstart which should allow me to reduce some CC utilization and possibly also lower some APRs.  My first Upstart approval was surprisingly easy so I am hopeful that a 2nd loan would be as well.  

I don't want to screw up my chances with Upstart.  

I also have a Discover 0% BT offer on my currently existing Discover card, but can't really take advantage because there's not much space on that card. 

So if I *did* get approved for FNBO I could move the Discover balance to FNBO and then move something else to Discover and get 0% on both.

What would you suggest in this situation?  I'm happy to wait and not take any of these offers if that's what's needed.

I feels good to start to get halfway decent offers in the mail.  It's been so long, part of me is afraid to "miss the boat."  Even though as things continue to improve, it shouldn't be as rare anymore.  

Thoughts?

@SouthJamaica , @tcbofade , @K-in-Boston, @FinStar 

[tcbofade]

Right off the top of my head, FNBO has a prequalify tool that is a soft pull, and I would use that.

IF approved, don't count on the credit line that they quote on the pre approval... it could be less.

If you get a preapproval, you can apply for the FNBO card and transfer SOME of your Discover balance over to the new card...depending on limit, of course.

If you've got every account under 88%, start getting all of them under 68%.

You can do this!

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@tcbofade , Thanks for the suggestion about the prequalify tool, I hadn't thought of that!  I just used it and the only one I prequalified for was a secured card so I will pass on FNBO for now.  You totally saved me a hard pull!

Also thank you for the words of encouragement

[SouthJamaica]

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@Expansion wrote:

I was surprised today to get in the mail an "invitation" (not preapproval) for the FNBO Maximum Rewards Visa card.

Apparently since I signed up for a waitlist for a FNBO business CC, for some reason they sent me an offer for this *personal* CC.

It's 0% APR through June 2023, then 15.99-23.99 (so I would only be using it for the BT).

No annual fee, 1% cash back (though I don't really care about cash back--that's not my focus).

So, in a few months I should be eligible for a 2nd loan through Upstart which should allow me to reduce some CC utilization and possibly also lower some APRs.  My first Upstart approval was surprisingly easy so I am hopeful that a 2nd loan would be as well.  

I don't want to screw up my chances with Upstart.  

I also have a Discover 0% BT offer on my currently existing Discover card, but can't really take advantage because there's not much space on that card. 

So if I *did* get approved for FNBO I could move the Discover balance to FNBO and then move something else to Discover and get 0% on both.

What would you suggest in this situation?  I'm happy to wait and not take any of these offers if that's what's needed.

I feels good to start to get halfway decent offers in the mail.  It's been so long, part of me is afraid to "miss the boat."  Even though as things continue to improve, it shouldn't be as rare anymore.  

Thoughts?

@SouthJamaica , @tcbofade , @K-in-Boston, @FinStar 

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IMHO it's not a very good card and it's a slightly misleading flyer, suggesting that this has better rewards than other cards. I've gotten the same flyer twice, and shredded it fast. A 1% cash back card is not something I need.

But it depends on the recipient's circumstances. FNBO is a reputable bank, and the offer does have a promo rate, so it's better to get a card like that than a predator card.

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Thank you @SouthJamaica for your thoughts here!  I wasn't familiar with this card and it's helpful to have your insight.

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So today on a whim I googled "Upstart personal loan competitors" (or something like that) and clicked on an ad link to Discover personal loans.

I did a soft pull pre-qual thing and got offered $15,000, at 13.99% APR, for 36 months. 

(better than the 15.24% on my current loan with Upstart

and the 19.94% Lending Club has been offering). 

Monthly payments of $513/month.  Which isn't that much more than the extra $400/month I was planning to use to pay down balances.

There were options for longer terms, but all at higher rates.

Then the next screen asked me to call right away.  (I checked, this is normal.)  It was just after the office closed, so I need to wait until tomorrow. 

70% of the loan gets paid directly to the credit cards I'm paying down.  30% can be paid into my account.

I looked at my numbers really carefully. 

I could actually use this to get all but one of my balances down to 68% utilization. 

And then that last card would just need $386 more to get all the way down to 68% (easy). 

For 3 cards it would be a small interest rate reduction.  (.25 - 2%)

For 3 cars it would be a small interest rate increase (around 1%)

For 3 cards it would be between 3-5.99% increase.

Combining to about $273 more interest per year. 

Normally I would not in a million years think about moving balances to a higher rate and paying more interest. 

But if $273 more a year gets this moving, I'm comfortable with that.  And if this means I will soon be getting 0% BT offers, then it seems like it would more than pay for itself.

I checked the online reviews.  I checked a bunch of posts on these forums too.

Doing my due diligence, I did soft-pull prequals with Apple FCU and NASA FCU (where I am already a member) and both said no offers at this time. 

Is there any reason for me not to do this Discover personal loan? 

@tcbofade , @SouthJamaica , @FinStar , @K-in-Boston 

[Anonymalous]

Sounds like a pretty straightforward gamble. You're betting that $273/year against a chance at reducing at least some of the $8K or so you're paying in interest each year. I can't speak to your odds on getting a balance transfer offer because I don't have any experience in the area, but since that's such a tiny percentage compared to your overall income, and you seem quite confident you can make the increased monthly payments and come up with the couple hundred extra you need to get everything below 68%, even if it doesn't pan out you're not setting yourself back much.

Definitely agree it feels wrong to move debt to a higher APR, but even ignoring the potential upside of a BT offer, it doesn't seem to have much impact on your overall financial picture.

[tcbofade]

It's not a bad idea.... essentially, you're paying money for a better Fico score... which will save you money...

I would check with PenFed's personal loan prequalify tool before pulling the trigger.

Good luck!