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  1. #1
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    Default Are balance transfers a bad idea?

    Newbie here--really glad I found your board!

    I was just approved for a Discover card with a decent credit limit (6,200, and second favorite card after Visa Cash Plus). One of the big promos for the card is 0% interest on balance transfers for a specified amount of time (and then 12.99% thereafter). I have 3 other cards and carry a balance on my Amtrak Guest Rewards card from Chase. It was my first card and has great travel perks, but a poor APR of 19.29%.

    I'm paying down the balance on the Chase card, but thought I might save some money in the meantime by transferring the remaining balance to Discover.

    My question is two-fold: does the credit card issuer itself look favorably on these balance transfers, and will doing it be a bad idea for my credit score?


    Thanks in advance for any words of wisdom you can send my way--appreciate it and glad to be a new forum member.
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  2. #2
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    Two things to look for: Most important, is there a fee for the balance transfer? There usually is, often 2-4%. You pay this at the time of transfer and reduces any interest rate savings from the transfer.

    On what do issuers think: I would guess they don't really care/notice. Yes, Chase would like you to continue paying interest to them, but paying it off reduces any risk, and is part of the normal process.

    On score, compare the credit limit on each card. Part of the score is utilization, both overall and on each card. So if you currently owe $3K on a card with a $10K limit, moving that to a card with a $6K limit could reduce the score (as per card utilization has gone from 30% to 50%). If the discover card has a larger limit than Chase, transferring won't hurt the score (and could help).
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  3. #3
    Centurion Member DavidNY's Avatar
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    You could get a Chase Slate card (0% BT fee) and use that to pay your Discover bill for the next couple of months while you pay off the Chase Amtrak card.
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  4. Centurion Member
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    Quote Originally Posted by Husker View Post
    Newbie here--really glad I found your board!

    I was just approved for a Discover card with a decent credit limit (6,200, and second favorite card after Visa Cash Plus). One of the big promos for the card is 0% interest on balance transfers for a specified amount of time (and then 12.99% thereafter). I have 3 other cards and carry a balance on my Amtrak Guest Rewards card from Chase. It was my first card and has great travel perks, but a poor APR of 19.29%.

    I'm paying down the balance on the Chase card, but thought I might save some money in the meantime by transferring the remaining balance to Discover.

    My question is two-fold: does the credit card issuer itself look favorably on these balance transfers, and will doing it be a bad idea for my credit score?


    Thanks in advance for any words of wisdom you can send my way--appreciate it and glad to be a new forum member.
    Card issuers will frown if you are utilizing a large percentage of your available credit. This could potentially cause them to think you are in tough times and prone to charge alot that you can't pay later. Having a high utilization percentage will also negatively impact your credit score as well if you use more than about 20%. (the number varies depending on who you ask.)
    Gas: Discover It, Penfed Platinum Rewards x2, Chase freedom, Citi TYP
    Plane tickets: CSP
    Groceries: AMEX BCP, Penfed Platinum Rewards,Citi TYP
    Clothes: Express, Amex BCP, Discover IT
    Amazon: Citi Forward, Cash +
    Restaurants: Citi Forward, Chase Freedom, Discover IT, CSP
    Hotels and other travel: Discover Escape, CSP
    Movies: BofA travel rewards visa signature(fandango), Discover IT, Citi Forward, Freedom
    Bars, clubs, tomfoolery: CSP, Citi Forward, Discover IT, Freedom
    Balance transfers: Kroger 123 rewards
    Bill Pay: Chase Ink Plus, Citi Forward
    Everyday spending: Bofa Accelerated cash rewards amex, Discover Escape
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