Balance transfers

[Anonymous]

Will transferring balance of two credit cards of a combined amount of $5500.0 to a new credit card offering 0% interest negatively affect my FICO score?

[haulingthescoreup]

Hi, Devf6, welcome to the forums!

We would need to know before and afters. What were the two credit card credit limits and balances (list each separately, please), and what is the credit limit on the target card? And what other cards do you have, and what is the util on them?

A high util on one card isn't automatically a score killer, depending on what else you have going on.

[RobertEG]

Your overall % util will only improve due to the new CL of the new card when added to  your total CL (credit limit), which may be minimal.  Total $ that you owe does not change just by opening a new card. So unless the new card adds substantial new CL, the hit you take in other scoring categories may hurt you more than it helps (new hard iinq). If the new card has a lower CL than existing cards, it may also put that single card at a very high %util.  And the new card will cost you approx. -10 points for the hard pull inquiry needed to get it.  And if the amount you put on the new card is close to its CL, then you will be hit for high %util of that individual card, which may lead, combined with the hard inq. needed to get it, to a drop in score..  FICO scores on overall %util, but also on %util of each individ TL (trade line, in this case a credit card).

Ultimately, getting new cards and higher CL's pales in comparison to paying down %util on what you currently have. My opinion.  If it is big CL card, and you dont need to apply for new credtit soon, and thus dont care about the short term (1-yr) hit due to the hard pull inquiry, then go for it.  But if you need your FICO in the next month or two to apply for new credti, it will hurt.

And, and, and, most BT's hit you with an immediate 3-4% fee on the amount of the BT.

It is all a matter of your individual situation.  If you dont plan to apply for major credit soon, and think that the immedaite BT fee iw sorth it and makes up for what you may gain in the long term, then forget your short term FICO.  But if you are seeking major credit soon, your FICO score then, and only then, has any meaning in the credit community.

Message Edited by RobertEG on 02-21-2008 02:17 AM

Message Edited by RobertEG on 02-21-2008 02:20 AM

[Anonymous]

I have only two credit cards with pretty high interest.14.7% ($4000.00 balance) on one,and 22.40% (2000.00 balance) on the other.Combined amount in monthly interest is about $100.00.I have an opportunity to apply for a Washington Mutual 0% interest until April 2009 with a credit limit of $7500.00.

Would it be a good strategy to transfer balances to this card which would enable me to make an extra $100.00 a month of payment towards lowering my balances?

[Anonymous]

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Devf6 wrote:

I have only two credit cards with pretty high interest.14.7% ($4000.00 balance) on one,and 22.40% (2000.00 balance) on the other.Combined amount in monthly interest is about $100.00.I have an opportunity to apply for a Washington Mutual 0% interest until April 2009 with a credit limit of $7500.00.

Would it be a good strategy to transfer balances to this card which would enable me to make an extra $100.00 a month of payment towards lowering my balances?

---

Check the language on that WaMu offer.  You are most likely being offered a preapproval on a CL up to $7500, but it could be as low as $500.  That is the standard wording on their offers.

As far as it being a good strategy, if it saves you money and allows you to pay down your debt faster, then yes, I would say it is a good strategy.

As far as what effect it will have on your FICO, that's not easy to say unless we know the CLs on the two cards you currently have, and the CL on the WaMu card (although I understand you won't know that until you actually get it!).

Good luck!

[marty56]

I had did a BT to consolidate 2 CCs balances into 1.  One at 43% util and One at 85 % util which I BT'd to a new card which beame 50% util.  I had my go up but I cant tell how much since I also had my only other 2 accounts go to 0 as well.

It seems for me that I also get a boost for having only one CC show a balance so your score might be effected if you pay off multiple cards and only have one showing a balance as well.

I just made a payment only my only CC showing a balance which brings the util down to 35% from 49% so I hope that will push my TU score over 760.  Next month I will pay it down to 20%.