moving blance--how will it affect score?

Anonymous · ‎06-26-2009

Will my Fico increase, decrease, or remain the same if I transfer balances from 2 credit cards to cards with 0% interest rates for one year?

JoeBJay20 · ‎06-27-2009

Most likely your score will decrease due to having the two new accounts, and perhaps another drop for the inquiries. If you're transferring balances to cards with higher CL, the score drop may be lessened by having a lower CC utilization. That being said, the score drop alone shouldn't be your only or even biggest reason for deciding to transfer the balances. If you're planning to pay the balances down or completely off, then obviously you will save money by paying down the balances at 0% opposed to whatever you're paying now. Also evaluate your current cards versus the cards you're transferring to, beyond the 0% introductory rate, are there other benefits to the new cards? Rewards? Interest rate after the intro expires? CL and frequency of CLI (or CLD)?

RobertEG · ‎06-28-2009

Doing a BT for a low intro rate is, IMHO, an unconscienable ploy of the CCCs. They would not be offereng this all the time if it did not benefit them more than you.

I sounds enticing,but is it smart?

They first hit you with standard 3% BT fee on the amount of the transfer. For a $5000 BT, that is an instant $150 added as a new charge on your account balance. So your account balance goes up,instantly. Your FICO goes down.

Then any payments you subsequently make are credited first to this meaningless account that is sitting over in the corner, and do not help you reduce the balance that you are paying real interest on.

IF you continue to use that card, debits will increase on the now-segmented side of your account that you are paying the prior interest rate on, and payments you make to them will contnue to be applied to the sham side of your account. Until you pay the sham sde to zero, all goes to their profit side. And if you dont get sham side down to zero wth the 12-month "intro" period, all then reverts to the full account interest rate.