Balance Transer Credit Cards (1 Viewer)

[DomePatrol2005]

Looking to transfer some debt to a credit card with a small transfer fee and 12+ months interest fee. Rewards on new purchases would be nice too. Any one have experience with this?

 

[saintmdterps]

If possible, instead take out a secured personal loan and pay off your balance that way. Your credit score goes up because you've taken revolving debt out and replaced it with installment debt.

I paid off an 11.9% card and got a 3-year loan at 2.25%, the difference in interest rates made me unconcerned about getting cash back and my credit score went up 50 points

 

[superchuck500]

Looking to transfer some debt to a credit card with a small transfer fee and 12+ months interest fee. Rewards on new purchases would be nice too. Any one have experience with this?

Balance transfers to zero percent are good ways to cut finance costs. If you have good credit, there are some great rewards cards out there. But if you are actually carrying significant balances that you don't expect to pay off during the zero rate period, you might want to consider an approach like terps suggested.

 

[jumpingoff]

I just did one on my Discover card yesterday. 2% transfer fee then 0% for 12 mos.

 

[St4ever]

The big kicker is if for any reason you do not pay in full by said date you get charged all of the interest at a much higher rate. Also by adding another card to your name lowers your credit

 

[COsaintsfan]

Citi Simplicity and Chase Slate are both cards designed for this.
0 percent for 15 to 20 months. One even has no fee for transfer and no annual fee.

I have done balance transfers twice in the past and it worked both times.
First time worked for longer, I cut it up immediately. The second card after I paid it off tey gave me a one year promotional rate of 5.9 percent and I hit it pretty good again.
I'm debating whether or not to transfer it somewhere.

 

[superchuck500]

Also by adding another card to your name lowers your credit

It's not quite that simple. The credit score is derived from a host of factors, but when it comes to new accounts the issues in play are age and utilization, and there will be at least one inquiry.

The credit score favors older accounts in good standing, so adding new accounts makes your average account age younger and reduces your credit score. But the credit score also favors the ratio of balance to available credit, called "credit utilization". When you add a new credit card, you're adding available credit . . . and presuming you aren't adding to debt at the same time, you have improved your credit utilization ratio, which improves your credit score.

Another aspect of new credit is that the application generates an inquiry, which impact the score right away, and then lessen their impact as they age - and a consumer opening new lines of credit is going to generate an inquiry (at least one - possibly more if the consumer was shopping for credit).

So a new credit card is going to generate at least one inquiry and the new account is going to bring the age down. These lower the score. But the top line credit availability increase will enhance the score if debt is constant. How it impacts the overall score will depend on each consumer's situation. Sometimes new cards will lower the score - sometimes it will raise it.

But also, credit approvals aren't simply based on score. If you're raising your available credit but not raising your income, that will be reviewed in your next application. Your score might be okay, but if you have reached a point that you could run up your lines of credit that exceeds your reasonable ability to pay it off based on your income, that will be a negative factor in the application evaluation.