Is this balance transfer a good idea?

Discuss anything related to interest rates & fees, like balance transfer offers, low rate cards, annual fees, etc.
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jal540
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Is this balance transfer a good idea?

Postby jal540 » Sat Jan 02, 2016 7:10 pm

I have a credit card with several thousand dollars on it and a high interest rate. I will be able to pay it off in 8-12 months. But should I do a balance transfer to Chase Slate (no fee and 0% APR for over a year), and pay off that one? This will save several hundred dollars in interest and be faster to pay off, but I am not sure how this affects my credit rating. I currently have a total of three credit cards; one of the others has a large balance but lower interest rate.

I am thinking it best to do that balance transfer, save the interest, and pay it off as soon as possible. My credit rating is good now, and my next major purchase planned (a house) is at least 2-3 years away.

Thanks for any advice you can offer.


augiedog
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Re: Is this balance transfer a good idea?

Postby augiedog » Sun Jan 03, 2016 4:47 pm

Take the transfer, the terms on Chase Slate are very favorable as long as you pay the transfer off in time. Having another account could help your score. As long as you pay off the balance, your score will improve.

Ask your original creditor to lower your interest rate once you fulfill the balance transfer. It really does not hurt to ask every one of your creditors to lower your APR and will help you out in time to come.
American Express: Blue Cash Everyday (10k), Everyday, ; Discover It (7.3k) ; Target (2.1k)

Citi: Diamond (2k) ; Bank of America: Cash Rewards (2.6k) ; Capital One: Quicksilver (3k) , Sony ; Chase: Freedom (3.7k), Slate (3k), (Amazon) ; Barclay Ring ; Synchrony: Walmart MC, Amazon, Ebates

jal540
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Re: Is this balance transfer a good idea?

Postby jal540 » Sun Jan 03, 2016 5:42 pm

augiedog, thanks for the reply. It turns out that the card with the balance is 12%. (I confused it with one I just need to close --- no balance.)

I have heard that Chase Slate sometimes gives extremely low credit limits to new customers. I`ve also heard a few bad things about their customer service. This has me thinking twice, but a no-cost balance transfer and saving several hundred dollars is really appealing.

kdm31091
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Re: Is this balance transfer a good idea?

Postby kdm31091 » Sun Jan 03, 2016 8:32 pm

jal540 wrote:augiedog, thanks for the reply. It turns out that the card with the balance is 12%. (I confused it with one I just need to close --- no balance.)

I have heard that Chase Slate sometimes gives extremely low credit limits to new customers. I`ve also heard a few bad things about their customer service. This has me thinking twice, but a no-cost balance transfer and saving several hundred dollars is really appealing.


I don't know for certain what you'd be approved for of course, but I imagine Chase is more willing to be generous with the limit on a Slate because it offers no rewards. Not that I'd expect a 20k limit or anything, but you don't see many $500 Slate approvals the way you do with Freedom or Amazon (yes, it does happen!).

You sound like you have few inquiries, few new accounts, and by your description a good score. To be honest, I'd just apply for the Slate and see what happens. If you were someone applying for cards constantly I'd think twice, but you can afford to burn an inquiry in this situation if you aren't approved. So I'd just try and see what happens.

4ktvs
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Re: Is this balance transfer a good idea?

Postby 4ktvs » Sun Jan 03, 2016 10:06 pm

Someone I know was going to apply for this card but they were spooked by the fine print that more or less says they don't have to honor the $0 fee or %0 APR. They didn't really need to do it so they chose to just pay it off instead to avoid paying interest after the %0 promo expired.

But in your case I would do it since it sounds like paying it off in full isn't an option and that it will take some time to pay the money back.

jal540
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Re: Is this balance transfer a good idea?

Postby jal540 » Mon Jan 04, 2016 5:43 am

Thanks for the advice. I do have another credit card with a high interest rate, but I pay it off every month. However, if I get the Chase Slate card, I am thinking of closing the account. I`ve probably had it for two years.

I know it will lower my credit score some, but I don`t really want four cards. I`m not sure how much that will lower FICO.

takeshi
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Re: Is this balance transfer a good idea?

Postby takeshi » Mon Jan 04, 2016 8:32 am

jal540 wrote:This will save several hundred dollars in interest and be faster to pay off, but I am not sure how this affects my credit rating.

It's all about how individual utilization is impacted as a BT doesn't change your overall utilization. If you're applying for a new card to BT then that will have an impact as well.

jal540 wrote:I have heard that Chase Slate sometimes gives extremely low credit limits to new customers.

Limits are not determined solely by the card or creditor. They are determined by what one's credit profile and income qualify for. Always consider your sources. Those looking to app for BT cards like the Slate typically have high utilization which constricts the limits that they would qualify for.

jal540 wrote:augiedog, thanks for the reply. It turns out that the card with the balance is 12%.

Is 12% the APR or the utilization? Give us a better idea of your credit profile and we can attempt to guess. "My credit rating is good now" doesn't really tell us what we need to know. What's your revolving utilization on the card you're looking to BT from? What's your overall revolving utilization? AAoA? Any derogs? Any idea what any of your scores are and, if so, what scoring model and CRA are each of them?

jal540 wrote:I`m not sure how much that will lower FICO.

Primary impact due to closure is the impact to revolving utilization. AAoA is not immediately impacted since closed accounts on your reports factor into AAoA.

Don't let your FICO's drive all your decisions. Certainly keep them in mind but your overall financial health matters more than your scores. If you're looking to get a mortgage then you'll want to look at your mortgage FICO's versus relying on your FICO 8's.

jal540 wrote:I`ve also heard a few bad things about their customer service.

You'll always find bad experiences with CS with any company. I'm not saying don't discard CS but be careful relying on it as a primary criterion. Also be careful relying on anecdotal evidence. This is just more anecdotal evidence but I've never had problems with Chase CS and find their cards very useful to me. YMMV.

jal540
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Re: Is this balance transfer a good idea?

Postby jal540 » Mon Jan 04, 2016 6:21 pm

takeshi wrote:Is 12% the APR or the utilization?

The APR is 12%.

Do I calculate utilization as just the percentage of the credit limit I am currently using?
If so, right now I have an overall utilization of 49% and 50% on BT card. If I close the highest APR card, get a $5,000 credit limit on the new card, and pay off the balance (very doable), my overall utilization would go down to 32%.

If I do the above and also cancel the new card when it`s paid off, my overall utilization would be 39%. In two years (paying down the other high balance), my overall utilization could be below 20%. I understand less than 30% is considered good; the lower (but not zero), the better.

Thanks for the advice.

augiedog
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Re: Is this balance transfer a good idea?

Postby augiedog » Mon Jan 04, 2016 7:13 pm

12% is a low APR. What card do you have? You might want to save the Slate offer for any higher APR cards. I would keep that card open unless you have one with an even lower APR.

Yes, a lower utilization will improve your score. But as you have been paying off your cards as agreed, your score will continue to rise. Just pay everything off on time and pay more than the minimum.
American Express: Blue Cash Everyday (10k), Everyday, ; Discover It (7.3k) ; Target (2.1k)

Citi: Diamond (2k) ; Bank of America: Cash Rewards (2.6k) ; Capital One: Quicksilver (3k) , Sony ; Chase: Freedom (3.7k), Slate (3k), (Amazon) ; Barclay Ring ; Synchrony: Walmart MC, Amazon, Ebates

jal540
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Re: Is this balance transfer a good idea?

Postby jal540 » Mon Jan 04, 2016 7:44 pm

augiedog wrote:12% is a low APR. What card do you have? You might want to save the Slate offer for any higher APR cards. I would keep that card open unless you have one with an even lower APR.

Yes, a lower utilization will improve your score. But as you have been paying off your cards as agreed, your score will continue to rise. Just pay everything off on time and pay more than the minimum.


It's a Citi Simplicity from a couple of years ago. I did a BT then. The other card I have with a balance does have a lower APR. These are the two I plan to keep.

It turns out that a BT, given my timeframe for paying this one off, would save $300. This might not be worth a BT and eventually closing two cards. I don`t know, but I`ll decide soon.



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