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Question By
dhively

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Balance transfer will max out new credit card - Will this hurt my credit score?
I'm in pursuit of paying off some debt in hopes of applying for a mortgage within the next year or so.
I recently applied for a new credit card with a 0%/$0 balance transfer fee and no interest in order to pay down my debt more quickly. However, I was only approved for $7000 credit limit on the new credit card. The debt I'm planning on transferring over is $6,800, which is almost maxing out this new credit card. I'm worried that transferring the balance and almost maxing out this new credit card will significantly hurt my credit score. I'm wondering if anyone has experienced a situation like this and can shed some light?

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I dont think that a good idea considering credit limit is a huge impact i would make payments or partial transfer

Reply by
sw3019

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That is not true.  They combine all of you available credit together and determine how much you use.  My husband just combined all credit cards on one card because they offered 4.99 percent interest.  It has all been reported to the credit bureau and his credit score actually has gone up a little because since we did that we have paid more on the card the transfer went to so the total credit used is going down faster.

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I think you'll be dinged

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Hmmm. Not sure I agree with faidros. 

I have about $100K total credit on cards, all with zero balances and no other debts. I recently got a loan from Lending Club of $2000. Within two months my FICO dropped from 830 to 750 because of 'high utilization'. Only that one account had a balance, so that account's credit utilization was close to 90% when I saw the FICO drop, whereas my overall credit utilization was less than 2%. 

That was six months ago. I immediately paid them $1000, plus the $400 and interest I had already paid, to bring utilization down below 30%. My FICO scores have still not recovered, although CreditKarma (and other sources) reports that both credit agencies now show my FICO between 810-820. 

So yes, I think you will be dinged for high utilization. Nevertheless, it's the fastest way to clear out debt, so overall I think you did the right thing. 

Reply by
TerreDee

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Nope, it's worse than I thought. Eight months after getting the Lending Club loan, six months after saw a huge drop in my FICO score and moved quickly to bring the utilization under 30%, CreditKarma shows my FICO at 808 and 812, so my FICO has not recovered.

Here's Wells Fargo in the news this week for ripping off thousands of customers, firing 5,300 salespeople for fraud and sending the head of their department off to retirement with over $100million and glowing language, and here's us, being battered by their stupid system despite being honest and ethical and responsible. 

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While the utilization on this credit card will be high, its your overall credit utilization which will be used to measure.  You received an additional line of credit, thus you would actually see an overall decrease as long as you do not use the credit lines that you most recently transfered.  Use this time to pay down substantially the debt you just transferred and watch your utilization lower month over month.

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Why do Anything

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I just paid off a 5 yr loan on my car and have lowered 2 more credit cards for payoff in January. I also moved a high payoff credit card to a card I nearly had paid off and I did not max it. What do I get for this.A DROP OF 30 PTS IN MY FICO SCORE???????????

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I would not move any amount of credit card debt over to the new credit card.  Instead use the new card credit for future activities like current bills and living expenses. Once you put a stop on using old credit card, make weekly payments of 100. After one your, keeping your new and old credit card in balance, you should be in great shape as in credit score and the usage percentage on both cards.  Just remember., keep your new credit card under 1000 after all both credit cards are combined as one big debt ratio to your income.   Keep all debt under 15 percent of your income.  

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