CC Balance Transfer Question

[emnah94]

I have a $4200 balance on a CC w/ 9.9% APR...about $38 interest each month. It is my only CC debt and I want to get rid of it. At this rate, I will be able to pay it off in about 4-6 months at the most.

I got a CC offer in the mail the other day for the BofA Visa Platinum, 0% APR for 12 months, no balance transfer or annual fees. I read and re-read the offer and understand that if I pay late, go over my limit, or close the account, I will lose the 0% APR (which I have no intention of doing). I'm interested in taking advantage of this offer, so that I can pay it off w/out accruing interest, but I'm curious if the effect of opening another credit card (I have 3 total, only one of which has a balance) will have on my FICO score. I did the FICO estimator on bankrate.com and it shows that opening another credit card will drop my score by approx. 10 points.

If I stick to not opening another card and just pay of the current CC in 6 months or so, I'll be losing about $230 in interest. If I transfer my balance to the 0% APR, I won't lose that $230, but my FICO score will be affected.

What's the best way to go here?

[Snoopy2645]

Re: CC Balance Transfer Question

I would do the balance transfer unless you are trying to get a high fico score to buy a house or something or a car. I have transfered lots of balances to 0% I havent paid interest on ccs in years. Paying interest makes me sick literally!!

And BTW I have a fico score of around 800 I just really dont pay attention to my fico. I never get loans on cars & I dont plan on buying another home anytime soon. I would love to but just probably cant afford a higher house payment.

[mjrube94]

Re: CC Balance Transfer Question

I have two questions: 1) How good is your credit score? If it's great, and drops 10 points it's probably not as big a deal as if it were bad and dropped 10 points. Also, do you anticipate needing credit (mortgage, car loan, etc.) in the near future? If not, it may be worth the drop in your score to save the $$. (Even if you don't think you'll need credit, auto insurance and other companies look at your credit when revising your rates, but I'm not sure what the impact would be).

[emnah94]

Re: CC Balance Transfer Question

Thanks for the info. For clarification, I am concerned about my FICO score because I just want to work on getting it higher, but not b/c I'm anticipating a mortgage or car loan in the near future. I haven't checked it lately, but bankrate.com's estimator puts me in 690-740 range if I don't do the transfer. Since I'm not applying for a big loan or anything, I guess it going to 680-730 isn't TOO big of a deal since I'll be saving the interest and paying off that debt.

[Ima saver]

Re: CC Balance Transfer Question

I would transfer it and pay it off as soon as possible. Your score will go up when you have a zero balance.

[debtfreeme]

Re: CC Balance Transfer Question

One, I would call B of A and make sure that the amount of credit they will extend to you will cover the amount you want to transfer and not put you at risk of using more than 50% of the available credit on the new card. If it is less than you need to transfer the entire amount then transfer only what you can to make this new card have no more than 50% used, preferable 30% to keep your fico score ok, and to possibly raise it. It can raise it if you are using more than 50% of the current available balance on your old card because then the ratio of debt to available credit drops.

If you can only transfer part of it, do it, because then you can focus on paying off the higher interest rate first and you will still save money. BUT also make sure to find out that if you transfer XX amount of money, what the payment will be, and how it is calculated and make sure you can afford a minimum payment to the new card while paying off the old one. If that would take too much away from the old card and slow down the payments then forget the whole thing and just make sure to pay off the card faster.

[flash]

Re: CC Balance Transfer Question

I got a CC offer in the mail the other day for the BofA Visa Platinum, 0% APR for 12 months, no balance transfer or annual fees. I read and re-read the offer and understand that if I pay late, go over my limit, or close the account, I will lose the 0% APR (which I have no intention of doing).

What's the best way to go here?

Losing the 0% is not the worst that will happen.

if you do anything of these things, they can notify all of your creditors, and all of your accounts can be affected. New law, and not much is being posted here about it, but ANY problem on one account WILL likely effect other accounts. They can close them, raise your rates, shut down other credit, etc.

Is there a penalty for transfering or closing the account during the 12 months? Most cards with these special offers do, usually around $75.

[debtfreeme]

Re: CC Balance Transfer Question

Flash is right about that. Breaking any portion of the agreement can and will affect your credit rating and how your other cards work with you. They will never tell you where they got the info just that they have gotten it from "a recent review of your account and credit report".