STYLETHREAD -- LET'S TALK SHOP!

Metric · Gucci

Credit Card Question

kmd · Kate Spade

Sometimes it does, but have you tried calling your current CC to see if they'll lower your interest for you? In these times especially, it's worth a shot. They may even match that low balance transfer rate for 6 months. It might take a little work, but it could be worth it. That's what I would do first. Another thing is, is you don't know what the credit line would be with the new card until you actually apply for it and get, so it may end up not being the best move. I also think the less cards anyone has right now, the better.

Metric · Gucci

It is a card I currently hold but don't use (because I don't need it and only prefer to carry 1 balance). It has enough balance to cover my Mastercard.

lynnie · Chanel

I agree that you should first see if the current cards will reduce your rate.

Vanessa · Kate Spade

Are you wondering how this would affect your credit score? Or whether it would be financially sound?

How much does your SO plan to pay off inside the six months? What happens at the end of the six months? (nevermind I misread your original post. I assume you're at 2.99 and after six months APR will jump).

If you plan on paying at least 3000 I think it will save you money to do it, as long as you're consistent. Of course the best scenario would be if you could pay it off entirely.

As far as your credit score this transaction could affect your utilization ratio. This depends on the overall credit limit on each card.
For example if card #1 has a limit of 21K and you're using 7k then you're at 33% utilization.
If card #2 only has a 14k limit and you xfer the 7k balance you will now be at 50% utilization and when/if the CC co. reports this to the bureaus it will be a red flag and your score will drop.

Conversely if you're at 50% utilization and the 2nd card has a higher limit, that might actually increase your score since it will "appear" you have less debt. It doesn't make true sense because most bureaus do not look at your entire available credit when they're making the determination that you have too much debt. It's not entirely fault of their own, but a combination of credit cards not reporting credit limits, properly sending updates, etc. It's quite messy, but based on personal experience by close monitoring of my credit scores via the three bureaus, that is what I've seen.

However this is easily reversible so if you are not planning a major purchase in the next 8 months, it won't matter a whole lot.
HTH.

ETA:
Edited because I didn't read the original post properly!

-- Edited by Vanessa at 13:40, 2009-03-12

Suasoria · Chanel

We have played this game again and again. If I were in your shoes I would indeed call MasterCard and ask them to match it. They won't. OK thank you. But don't close the account.

Then transfer the balance to the Visa, pay down as much as you can, and don't make any purchases on it. If you need to use a credit card during this time, use the MC, but pay the balance off every month so it stays at zero.

In the fifth month ask MC if you can transfer the remaining $4000ish debt back to them for the lowest rate they can offer. Also call around to see if any other companies will take it at a ridiculous rate.

Take the lowest offer, transfer, leave the Visa open, don't use it. Repeat as needed until it's gone. (You just have to remember when it's time to shop for a new rate, and don't let it jump to the 18-20% range, which is usury.