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Adverse action for BT?

jmcmillan
Regular Contributor

Adverse action for BT?

Would I be at risk if I did a BT to my Discover card if I used 90% of my credit line? I really want to take advantage of the 0% balance transfer offer, but I don’t want to be balanced chased, or any other adverse action. I would not actively be applying for credit during this time. I calculated my overall util would be about 30%.

Message 1 of 21
20 REPLIES 20
TRC_WA
Senior Contributor

Re: Adverse action for BT?

@jmcmillan 

 

It didn't happen to me.  I have some 0% BT offers in force right now on my Reflect and Ollo Rewards cards... both were at 80-90% of the limit when I took them out and I never saw any AA from anyone.

 

Didn't see any major score drops either... although I know once I pay them down my scores will go up.

BK 13 filed : 2-28-17 BK 13 discharged : 3-22-22
FICO8 current as of : 6-1-23 EQ: 674 TU: 663 EX: 669
Hard INQs last 12 months: EQ: 5 | TU: 9 | EX: 5
WF Platinum $1000 WF Reflect $6000 Verizon Visa $4000 Ollo MC $4000
Mission Lane Visa $1850 Credit One Platinum x5 $3000 Credit One Wander $1700 Upgrade Visa $2000
PenFed Gold Visa $2500 Amex Delta Gold $10,000 Care Credit $8000 Petal 1 Visa $2900 Cap One QS $500
NFCU CashRewards $2000 Apple Card $1500 Best Buy $2000 Amazon $2800
Wells Fargo auto loan (2022 Ford Bronco Sport Badlands - Cactus Gray) $37k 6.79%
Total CL: $54,750 --- Total CC UTI: 14% --- AAoA: 12.5 years --- Income: $100k
Last CC app: 5-27-23 Gardening until: 6-1-25
Message 2 of 21
FireMedic1
Community Leader
Super Contributor

Re: Adverse action for BT?

I got the offer also. Dont need it. But. Disco is very rare to see balance chasing. Last time was yrs ago. But the poster had all kinds of issues. Without knowing your other cards. Should be fine.



Homeowner Sept 2020. 2021 Explorer ST Chase 3.1%. Sharing my rebuild after BK from learning here. Started 540's. FICO 9 801 as of 05/03/2023. I stayed around to pay it forward for those who helped me back then.

Message 3 of 21
Remedios
Credit Mentor

Re: Adverse action for BT?


@jmcmillan wrote:

Would I be at risk if I did a BT to my Discover card if I used 90% of my credit line? I really want to take advantage of the 0% balance transfer offer, but I don’t want to be balanced chased, or any other adverse action. I would not actively be applying for credit during this time. I calculated my overall util would be about 30%.


Disco will not balance chase you providing that your payments are adequate. Id make sure to not pay anywhere near minimum because Disco is reporting increases in losses, that's when chance of AA increases. 

 

None of that means that other lenders would or wouldn't take AA. Some are fine, others might jump on it. 

If you are rebuilding, I wouldn't do 90%. 

Just because it didn't happen to someone else, it doesn't mean it won't happen to you. 

Conversely, just because someone else experienced AA, it doesn't mean you will.

So, in a nutshell, Disco is fine as longs as payments don't make it look like they may end up holding the bag.

Your other lenders, that's trickier part. 

Message 4 of 21
CYBERSAM
Senior Contributor

Re: Adverse action for BT?


@jmcmillan wrote:

Would I be at risk if I did a BT to my Discover card if I used 90% of my credit line? I really want to take advantage of the 0% balance transfer offer, but I don’t want to be balanced chased, or any other adverse action. I would not actively be applying for credit during this time. I calculated my overall util would be about 30%.


This should not be an issue! However make sure that you pay 3 or 4X the minimum payment amount, otherwise you are at high risk of AA.

Few years ago I did BT with Disco and by paying minimum payment for few months! I got AA from Disco and Cap1.

 

@RemediosIs always on top of things! Sry to post the same thing, your too quick Smiley Happy







              
Message 5 of 21
TRC_WA
Senior Contributor

Re: Adverse action for BT?


@Remedios wrote:

If you are rebuilding, I wouldn't do 90%. 

Just because it didn't happen to someone else, it doesn't mean it won't happen to you. 

 


Very true.  Even though I said I had no AA for my 80-90% BT's I did... I'm not gonna lie... I was nervous that AmEx might do something with my $10k card like drop my CL but they didn't.  It's been months now so not really worried about it any more.  AmEx is still watching me like a hawk though... can't get a CLI till the Ch 13 falls off and they've pulled my reports pretty much every month.  Smiley LOL   I have good history with them though... both previously and with the new account that has been PIF for 8 months with good usage.

 

@CYBERSAM wrote:


This should not be an issue! However make sure that you pay 3 or 4X the minimum payment amount, otherwise you are at high risk of AA.

Few years ago I did BT with Disco and by paying minimum payment for few months! I got AA from Disco and Cap1.


Good advice too.

 

I forgot to mention... in my BT's I've generally paid about 10x the minimum... no AA.

BK 13 filed : 2-28-17 BK 13 discharged : 3-22-22
FICO8 current as of : 6-1-23 EQ: 674 TU: 663 EX: 669
Hard INQs last 12 months: EQ: 5 | TU: 9 | EX: 5
WF Platinum $1000 WF Reflect $6000 Verizon Visa $4000 Ollo MC $4000
Mission Lane Visa $1850 Credit One Platinum x5 $3000 Credit One Wander $1700 Upgrade Visa $2000
PenFed Gold Visa $2500 Amex Delta Gold $10,000 Care Credit $8000 Petal 1 Visa $2900 Cap One QS $500
NFCU CashRewards $2000 Apple Card $1500 Best Buy $2000 Amazon $2800
Wells Fargo auto loan (2022 Ford Bronco Sport Badlands - Cactus Gray) $37k 6.79%
Total CL: $54,750 --- Total CC UTI: 14% --- AAoA: 12.5 years --- Income: $100k
Last CC app: 5-27-23 Gardening until: 6-1-25
Message 6 of 21
jmcmillan
Regular Contributor

Re: Adverse action for BT?


@Remedios wrote:

 

If you are rebuilding, I wouldn't do 90%. 

 


 

I am rebuilding, that's why I'm worried about doing it.

 

Message 7 of 21
FireMedic1
Community Leader
Super Contributor

Re: Adverse action for BT?

@jmcmillan 

Just an idea. May keep your mind at ease. Why not 50% of what you wanted to BT? Still saves some $.



Homeowner Sept 2020. 2021 Explorer ST Chase 3.1%. Sharing my rebuild after BK from learning here. Started 540's. FICO 9 801 as of 05/03/2023. I stayed around to pay it forward for those who helped me back then.

Message 8 of 21
Remedios
Credit Mentor

Re: Adverse action for BT?


@jmcmillan wrote:

@Remedios wrote:

 

If you are rebuilding, I wouldn't do 90%. 

 


 

I am rebuilding, that's why I'm worried about doing it.

 


If I may ask, how much are you wanting to transfer and which term in months? 

Let's pretend it's $1000.00. if you are paying $100, you should be just fine, balance is noticeably going down. If you're planning on paying $35.00, I'd worry a little. 

So, if you take the total amount you're trying to BT, divide it in 12 equal payments, it should work. To Disco, it indicates BT will be payed off. Once balance gets lower, making smaller payment won't be a big issue. 

If you're doing 18 months, your first 3 payments should be larger (Not large enough to defy a purpose for doing BT, only to drop it down so it gives appearance of balance going down on the report), then divide rest of the balance by remaining number of months and set it to cruise 

Message 9 of 21
jmcmillan
Regular Contributor

Re: Adverse action for BT?

@FireMedic1 @Remedios 

 

Let me provide more details. I am trying to pay off a predatory student loan that is costing me a fortune, and I’m close to having enough money to pay it off, but I am about $3500 short. My credit line with Discover is $3700. I would take the $300 that I’m paying for the student loan and apply it to Discover. I am expecting a bonus from work in August, so I would likely have it paid off then. I would likely choose the 12 months for 0% offer.

Message 10 of 21
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