Should I consider a balance transfer card?

[strandolph]

General info: Credit Score 725 as of 12/13 with 3 Hard inquiries. $70k debt in student loans (always paid on time).

I currently have 2 credit cards. One is a American Express Corporate card and the other is a Macy's American Express card.

I use the Corporate card strictly for expenses and pay off the balance in full every month. The Macy's card currently has a balance of $1400 with a credit limit of $5000-- APR 24.5%.

I'm in sales and expense quite a bit throughout the month and would like to utilize these expenses on a rewards card (preferably Chase Sapphire Rewards).

I'm having trouble paying off the $1400 on the Macy's given my current budget, I only pay the minimum each month and am planning on paying it off in full once I sell my employee stock purchasing account in 4 months. (I realize I am paying unnecessary interest fees by only paying the minimum).

I have several ideas:

1. Transfer the balance on my Macy's card to a Chase Slate Card with 0% introductory APR and $0 balance transfer and wait to apply for Chase Sapphire Rewards Card so that the (2) credit requests don't affect my credit score.

2. Keep paying minimums on my Macy's card and apply for Chase Sapphire Rewards card to use as company expense account card.

3. Transfer balance on Macy's to Chase Slate AND apply for Chase Sapphire Rewards card. (How badly will this affect my credit score to apply for both at the same time?).

Note: I only plan on transferring Macy's balance to Slate card as long as the credit limit is enough to keep me under 30% card utilization like my current Macy's account.

[Retired To Win]

With an APR northwards of 24% on one of those cards, you need to get some other credit cards pronto... especially if the Macy's card is also of the high APR variety.

From past experience, here's how I've handled situations like that.

(1) Find a credit card balance transfer offer that is good for at least a year and carries a balance transfer fee no higher than 4%. (Of course, the longer and the lower the better.) (2) Transfer those high APR balances over! (3a) Size your payments so that you get paid off before the 0% promotional APR runs out or (3b)Starting 9 months into that transfer, be on the alert for a subsquent 0% APR offer from another credit card and REPEAT!

Good luck!

[doingitallwrong]

If you're planning on paying the $1,400 balance of the 24.5% Macy's card off in 4 months, that interest (if my calculations are correct) adds up to about $115 (around $28/month). Not peanuts, of course, but for me, I'm not sure it would be worth the rigamarole of a balance transfer. (Especially considering it usually takes a few weeks for the transfer to go through, so it would probably be closer to 3 months from transfer to pay off and around $85 interest.)

If you were carrying that $1400 balance without any chance of paying it off, except for the minimums, absolutely the balance transfer would be the way to go. (Quite honestly, even if you don't pay it off within that time, the interest rate will probably be lower than 24.5% so you'll still have some advantage.)

That said, how are your savings? It might be better to do the balance transfer, commit to paying it off within the time allotted, and take the money from your employee stock account and put it into savings so that you have at least a small emergency fund. Use the rewards from the expense card to pay extra on your student loans, or on the balance transfer if necessary.

[strandolph]

Thanks for the advice guys. I may just try and pay off the macy's card more aggressively to avoid adding an additional line of credit since I plan on also getting a rewards card in the near future (within the year).

[snafu]

Good on you for paying your AMEX card balance every month when due. It's important that income not yet earned be used to support month-to-month living. I wonder why your Macy's card has such a high interest rate? Have you tried calling and asking for a reduction in interest?

If the cards you are considering likewise have a high interest rate unless you can reconfigure your finances all those rewards will go to interest whether from sales expenses, personal stuff or entertainment. I suggest you make certain they waive the 1st year card fee and plan to move on to another cash back program cancelling the 1st to avoid the fee.

I wonder if you'd be willing to make a few short term changes to clear the Macy's balance faster with less interest? Could you take lunch, avoid coffee shop treats, delay desired purchases and do those dozens of tiny cuts which seem paltry on their own but add up over several months? How much interest have you paid Macy's in the past 6 months? We who are savers are frustrated that we get .09% for savings and you are charged 24.5% for your CC.