Credit Balance Transfer

[Lavish Frugality]

Hello All,

I have a credit and credit card debt situation that I would like some feed back on:

I have a 5k credit card that I've used for the past 4 years. I have max this card out many times and paid it off every time.. This card currently has a 3k balance, I am now thinking of transferring its current balance to a 18 month 0 apr new card to pay off the high balance.

Question: Should transfer this balance to the new card and leave the old card inactive permanently? If so will leaving the old card inactive permanently until it closes negatively effect my credit score?

Or...

Should I transfer this balance to the new card, pay it off but keep the old credit card active and once the new credit card is paid off leave that one inactive permanently until it closes?

Or...

Should I just pay my current balance off on the old card with its current interest rate of 12%?

Please let me know which option will be most beneficial to my credit score and for my finances?

If you have any other suggests please let me know Thanks in Advance

[bjl584]

Transfer the balance to the new 0% card and leave the old card open. Your credit report is determined, among other things, by how much available credit you have and how much credit history you have. Closing the old card once paid off will lower your score.

I'm assuming credit score is what you are asking about.

[Lavish Frugality]

Yes my credit score is the main concern, but should i close the new card once its paid off?

[bjl584]

Yes my credit score is the main concern, but should i close the new card once its paid off?

Closing the new card probably won't hurt that much, but it depends how long you have it open. What timeframe do you hope to pay the balance off?

If I may ask, what is your credit score now? You may be worrying over nothing. If it's 800, then having it drop to 780 probably isn't going to matter all that much.

[Lavish Frugality]

Closing the new card probably won't hurt that much, but it depends how long you have it open. What timeframe do you hope to pay the balance off?

If I may ask, what is your credit score now? You may be worrying over nothing. If it's 800, then having it drop to 780 probably isn't going to matter all that much.

I plan to pay it off within 12 months, my current score is 729. Also I won't close the credit card I would just leave it unused until credit card issuer labels it inactive. I've heard this is the only way to "close" a credit card that wont effect your score, but I dont know how true this is.

[bjl584]

I plan to pay it off within 12 months, my current score is 729. Also I won't close the credit card I would just leave it unused until credit card issuer labels it inactive. I've heard this is the only way to "close" a credit card that wont effect your score, but I dont know how true this is.

If you do that then you should be fine. Pay it off and just leave it be.

Going forward, you should strive to not carry a balance on your credit cards. Pay off the bill in full each billing cycle. If you don't have the cash to buy it, then don't charge it.

[Lavish Frugality]

Thanks for the advice

[bjl584]

Thanks for the advice

Carrying a balance can effect your credit score. Not only does interest accrue on the debt (except in 0% interest cases), but carrying a balance effects your debt vs available credit ratio. A small balance (less than 10% of available credit) won't matter much, but it's still a good practice to not have one if at all possible.