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carry balance on one or two cards?

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expatCanuck
Super Contributor

carry balance on one or two cards?

I've got two 0% BT cards -- 2.7/14K on one (<20%), 5.5/15K (~37%) on the other. 

 

I have a window to transfer the 2.7K to the latter card for no fee, which would give me an extra 4 months to pay off the debt (tho' I'm confident that I won't need that long).

 

Transferring the 2.7K would result in a utilization of ~55% for the latter card.  In any event, cumulative util is under 7%, and my remaining 7 cards will be PIF'd and report $0.

 

Will there be any significant FICO hit if I effect the full transfer, and could I transfer at least most of the 2.7 (say, as long as I keep the target card util under x% (where x 50/48/?) -- in other words, what's the single card util threshold above which things can start to get nasty)?


2023 Goal: save 3 months' net income

Starting FICO8: 666 (give or take a FICO)
[ Last INQ 12-Feb-2024 ]
EQ8415 INQ (Auto, CC, HELOC, 2 mort)7y2m
EX8125 INQ (2 CC, 2 mort, HELoan)6y11m
TU8294 INQ (3 CC, 1 mort)6y6m
5/243/12AoYA 0m | AoOA 23y6m~3%
Message 1 of 11
10 REPLIES 10
SouthJamaica
Mega Contributor

Re: carry balance on one or two cards?


@expatCanuck wrote:

I've got two 0% BT cards -- 2.7/14K on one (<20%), 5.5/15K (~37%) on the other. 

 

I have a window to transfer the 2.7K to the latter card for no fee, which would give me an extra 4 months to pay off the debt (tho' I'm confident that I won't need that long).

 

Transferring the 2.7K would result in a utilization of ~55% for the latter card.  In any event, cumulative util is under 7%, and my remaining 7 cards will be PIF'd and report $0.

 

Will there be any significant FICO hit if I effect the full transfer, and could I transfer at least most of the 2.7 (say, as long as I keep the target card util under x% (where x 50/48/?) -- in other words, what's the single card util threshold above which things can start to get nasty)?


50% is a threshold so yes you will get spanked. I recently lost 7 points for that.


Total revolving limits 741200 (620700 reporting) FICO 8: EQ 701 TU 704 EX 685

Message 2 of 11
expatCanuck
Super Contributor

Re: carry balance on one or two cards?

Thanks.  Any idea how close can I cut it (i.e. - 49.9 / 49.5 / 49.4 / 49 / 48.9)?


2023 Goal: save 3 months' net income

Starting FICO8: 666 (give or take a FICO)
[ Last INQ 12-Feb-2024 ]
EQ8415 INQ (Auto, CC, HELOC, 2 mort)7y2m
EX8125 INQ (2 CC, 2 mort, HELoan)6y11m
TU8294 INQ (3 CC, 1 mort)6y6m
5/243/12AoYA 0m | AoOA 23y6m~3%
Message 3 of 11
DollyLama
Established Contributor

Re: carry balance on one or two cards?

Less than 48.9%, to play it safe even 48 would keep it under without spooking creditors. 

Message 4 of 11
SouthJamaica
Mega Contributor

Re: carry balance on one or two cards?


@expatCanuck wrote:

Thanks.  Any idea how close can I cut it (i.e. - 49.9 / 49.5 / 49.4 / 49 / 48.9)?


Me personally I feel that 48% is the only comfortable spot because of possible interest getting added on.


Total revolving limits 741200 (620700 reporting) FICO 8: EQ 701 TU 704 EX 685

Message 5 of 11
expatCanuck
Super Contributor

Re: carry balance on one or two cards?


@SouthJamaica wrote:

@expatCanuck wrote:

Thanks.  Any idea how close can I cut it (i.e. - 49.9 / 49.5 / 49.4 / 49 / 48.9)?


Me personally I feel that 48% is the only comfortable spot because of possible interest getting added on.


A valuable caveat -- tho' there shouldn't be any interest 'cause these cards have 0% 'til May & September '19, respectively (and, when I calculate my payoffs, I make sure it's paid off a month early (I'm learning)).


2023 Goal: save 3 months' net income

Starting FICO8: 666 (give or take a FICO)
[ Last INQ 12-Feb-2024 ]
EQ8415 INQ (Auto, CC, HELOC, 2 mort)7y2m
EX8125 INQ (2 CC, 2 mort, HELoan)6y11m
TU8294 INQ (3 CC, 1 mort)6y6m
5/243/12AoYA 0m | AoOA 23y6m~3%
Message 6 of 11
HeavenOhio
Senior Contributor

Re: carry balance on one or two cards?

@expatCanuck, 48.9% is the threshold. Go above that, and you're no longer under 50%. Since you're not paying interest, 48.9% is fine. If you were paying interest, you'd want to aim for 46–47% to keep the next month's interest charge from bumping you over the threshold.

Message 7 of 11
Anonymous
Not applicable

Re: carry balance on one or two cards?

One thing that no one has mentioned is that the 8 point drop may have no practical effect if you think the card will be paid to < 48% in the next month (which you indicated would be the case).  Utilization scoring impact is a point in time -- penalties vanish once the utilization changes.

 

By a practical effect I mean something like you planning to buy a house or car in the next 6 weeks, and the score drop hurting your chances for approval.  If that is not going to happen, I can't see the 53% card mattering.

Message 8 of 11
expatCanuck
Super Contributor

Re: carry balance on one or two cards?


@Anonymous wrote:

One thing that no one has mentioned is that the 8 point drop may have no practical effect if you think the card will be paid to < 48% in the next month (which you indicated would be the case).  Utilization scoring impact is a point in time -- penalties vanish once the utilization changes.

 

By a practical effect I mean something like you planning to buy a house or car in the next 6 weeks, and the score drop hurting your chances for approval.  If that is not going to happen, I can't see the 53% card mattering.


Also a terrific observation.  All the big-ticket items happened in 2016 (car) & 2017 (mortgage refi, HELoan). 

 

The only practical effect that concerns me is spooking creditors.  All but 3 of these cards are new (6 months or less).  Given that I typically PIF 7 of the 9 before they report (or, at least, tend to have de minimus balances),  I think I should be okay. 

 

I'm not particularly concerned about BoA, as it has a 20-year history on me (and vice-versa) and seems delighted to give me more than enough rope to hang myself (one 30-day late 6+ years ago).  But I'm new to Barclay, Chase and Discover, and certainly don't want to do anything that might cause them to CLD.  Amex & I go back to '99; our history is rocky, but I've never stiffed them.


2023 Goal: save 3 months' net income

Starting FICO8: 666 (give or take a FICO)
[ Last INQ 12-Feb-2024 ]
EQ8415 INQ (Auto, CC, HELOC, 2 mort)7y2m
EX8125 INQ (2 CC, 2 mort, HELoan)6y11m
TU8294 INQ (3 CC, 1 mort)6y6m
5/243/12AoYA 0m | AoOA 23y6m~3%
Message 9 of 11
Anonymous
Not applicable

Re: carry balance on one or two cards?

I am fairly confident that never in the history of the CRAs has a CC issuer taken adverse action (such as a CLD) based on one card going over 49% when total utilization remained in the 1-8% range and one's FICO scores were in the mid 700s or higher.

 

Tweak those variables a bit and AA is conceivable.  For example if the card went above 88%, or if the score drop cause a person to go below some scoring threshold for that issuer (e.g. under 680), or if the total utilization went from below 9% to 31%... etc.  But given your particular situation, I'd estimate the chances of AA caused by the 53% card to 1 out of a million.

Message 10 of 11
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