Balance Transfer Resulting to Increased Individual Utilization

[Anonymous]

Good morning everyone! Hope you are all doing well. So my story is, I just recently accepted an offer from Discover to do a BT and did so by moving the balance from AMEX to them for the 0%  APR for 12 mos. I opted to accept the offer since Disco was kind enough to increase my limits after nearly 10 mos. of getting snubbed of an increase. Current limit on the Disco is 6K, balance moved from AMEX was 3.2K. Now I guess my question is since my balance would go slightly above 50% in UT, how would that impact my overall score. Total available limit is 33K, but i am worried that the aggregate UT on the Disco card might impact my scores a bit. I tried to request for a CLI today but nada. I should be able to bring the balance down to around 2K before the statement cuts in July. But score wise, for those who have had some similar BT scenarios, how much would that normally impact the Fico scores assuming that this would be the only card reporting a balance until fully paid? Thank you as always to all you wonderful people and all your advise. 

[Anonymous]

Individual card utilization penalty comes from your card with the highest utilization.  What was your utilization on your Amex card before doing the BT?  Your aggregate utilization I don't believe has changed before/after, correct?  If that's the case, what you need to compare is your highest utilization card before and after your BT.  If you're at > 50% now, but were in say the 29%-48.9% range prior, maybe you'll see a 10 point loss or so.  Like many things credit-related, this can be very profile specific. 

[Anonymous]

Thanks BBS. The balance was from the AMEX Charge so it did not count into UT before. Although it did factor as another card with a balance. My overall utilization remained at 1% from the previous months. The balance origin was also an offer I accepted from AMEX last April for a POT 0% interest till Oct 2018. It started off with 6.7K balance on it, then reduced it to 3.2K which was the balance I am just moved to Discover. I opted to move the balance because, the offer allows me more time to spread the payments, although I am trying to stictly  go by my schedule of paying it all off by Sept. There are always some unforseen expenses that might impede with finances, so I took the offer. Plus, I was hoping that this would trigger Discover to increase my limit again, closer to my AMEX revolvers in future.

[SouthJamaica]

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@Anonymous wrote:

Good morning everyone! Hope you are all doing well. So my story is, I just recently accepted an offer from Discover to do a BT and did so by moving the balance from AMEX to them for the 0%  APR for 12 mos. I opted to accept the offer since Disco was kind enough to increase my limits after nearly 10 mos. of getting snubbed of an increase. Current limit on the Disco is 6K, balance moved from AMEX was 3.2K. Now I guess my question is since my balance would go slightly above 50% in UT, how would that impact my overall score. Total available limit is 33K, but i am worried that the aggregate UT on the Disco card might impact my scores a bit. I tried to request for a CLI today but nada. I should be able to bring the balance down to around 2K before the statement cuts in July. But score wise, for those who have had some similar BT scenarios, how much would that normally impact the Fico scores assuming that this would be the only card reporting a balance until fully paid? Thank you as always to all you wonderful people and all your advise. 

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That's a trick question

Can't be answered without knowing (a) the Amex limit (b) the Amex balance before the transfer and (c) your other limits and balances after the transfer.

[SouthJamaica]

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@Anonymous wrote:

Thanks BBS. The balance was from the AMEX Charge so it did not count into UT before. Although it did factor as another card with a balance. My overall utilization remained at 1% from the previous months. The balance origin was also an offer I accepted from AMEX last April for a POT 0% interest till Oct 2018. It started off with 6.7K balance on it, then reduced it to 3.2K which was the balance I am just moved to Discover. I opted to move the balance because, the offer allows me more time to spread the payments, although I am trying to stictly  go by my schedule of paying it all off by Sept. There are always some unforseen expenses that might impede with finances, so I took the offer. Plus, I was hoping that this would trigger Discover to increase my limit again, closer to my AMEX revolvers in future.

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Assuming Discover is your only high balance card, I'm guessing you'll get hit around 10-15 points.

[Anonymous]

Hi SJ, thank you for the info. The starting balance with the AMEX was 6.7K prior to the Transfer. But it was on the AMEX Green Card. I took an offer for POT, which allowed me to carry a balance with no interest until Oct. this year. The balance started in April, and it has gone down to 3.2K from the last payment I made to AMEX before transfering the rest to Disco. Limits on my other cards are in my sig. But i do intend to just leave a balance on Discover until it is fully paid off. Thank you once again to you guys for the advise. 10-15 points is acceptable, anything above 20 of course would be painful. LOL!

[Anonymous]

Even if you do see greater than a 10-15 point drop, paying your Discover down below 48.9% will likely land you half or so of those points back.  Based on the percentage you're at now, it doesn't seem it would take many dollars to accomplish that.