Transfer Balance To New Credit Card ?
I was wondering if it would be smart to transfer about 4k off an existing card at 12% to a new one with 0% for 15 months and 8% fixed after 15 months. It looks like I would save hundreds in interest.
I would.
I do.
Keep in mind that this type of stuff can and does affect your fico scores, but it is worth it if you are leveraging your debt or working hard to get rid of it.
Make sure you read ALLL of the fine print on charges and do the math to figure out the real savings. And have a plan.
I hadn't heard that about it impacting your FICO scores before.
While it seems plausible, I wonder where you got that information?
Thanks for a heads up. :-D
Seems to me your score would rise. It would be 15 nmos. no interest and I could pay off the balance. At that point I would have an extra card with no balance.
That was my thinking, based on logic of rates, pymnts. And, who knows, maybe it will be different for you.
From what I am learning because I am asking alot of questions and looking around on many credit boards, it has to do with usage, percentages. Fico does not like it when you pay off a card suddenly because it does not 'compute'. Plus if you have a limit of 4K, and you borrow 4K you are using 100%. It does not like that.
My thinking is that it is not designed for today's creative use of credit.
But don't let that stop you as you may have a different experience.
It depends what you what to accomplish. If you are looking to lower payments and overall debt then do it. If you are looking to improve your credit score then you want to have at the most 20% of your credit limit on each card which will in turn raise your fico. The credit bureau's look at this as you are responsible to only borrow 20% on a credit limit and are not max'd out financially. The funny thing is the more cards you have (not over 20% of credit limit) the better your credit score regardless of income because it shows you know how to handle debt (payments must still be on time and if you pay 20% above you min. payment it will raise your score also) 8-)
Thanks greyhair!
That tip about paying 20% above min is new info. for me. I've been using offers for perm. low rates 2.99-5.99 for the last 2 yrs. for RE investing. I then just put the payments on autopay. I will now adjust those payments to 20% above pymnt. to help my fico's get back above 700 where they belong!
Also don't forget try to only use 20% of the credit limit (20% of the max you can spend on that card, leave 80% open line of credit)- If you need more money get more cards. This will boost fico. 8-)
Be careful. I think there is some questionable advise on here.
FICO scores are hurt by new accounts being open. You want the average age of your accounts to be older.
Yes opening new accounts will drop fico but not as much as leaving high balances (over 20% of credit limit ). If you have to open a lot of new accounts it may drop more in the beginning but if you use these principals it will increase your fico in the future ( the longer the accounts are established the higher the fico ) "The devil is in the details" :oops: