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Shygirlt31

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is it a good idea to transfer all your credit cards over to another card
Credit karma suggested in my recommendations to transfer all my cards to one card. I know my balance on my cards will be 0 if approved for the balanced amount but I'm not sure if this will help or hurt my credit.

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Will you be maxing out the card when you transfer your balances? If not, then go for it. But here are a few tips:

- Make sure the card you're transferring the balances to has a lower interest rate than the cards you're transferring from

- Check with the creditor on the new card to see if there are any 0% interest specials on balance transfers. Some offer 0% for a year.

Transferring all your balances to one card does have its benefits:

- It's nice to see $0 balance on so many cards!

- You only have to make payments to one creditor

- It can save you $$ if you're transferring the balances to a lower interest card

If you ARE going to max out your card with the balances transfer, OR you if don't have any 0% interest specials on balance transfers going on, I highly recommend applying for a low-interest personal consolidation loan instead. I went through lending club (just google them) and am very happy I did. They were actually recommended for me on CreditKarma. The loan had a MUCH lower interest rate than my credit cards. My credit card interest rates were roughly 13.99% - 18.99%. I transfered one credit card balance to a card with a 12-month 0% interest promo. Then I got a consolidation loan for 7%, paid off the rest of the cards, and am now 2 months away from being 100% debt free.

Benefits of applying for a consolidation loan:

- Lower payments

- Pay debt faster

- Gives you another "type" of credit (revolving vs installment) which helps your score

- lowers your debt to credit ratio, which helps your score

Downsides of applying for a consolidation loan:

- Hard inquiry on your credit report, which hurts your score temporarily

- Average age of your credit goes down, which has a slight negative impact on your score

But in all honesty, the positives and negatives to your score are a bit of a wash - it's totally worth it in my opinion.

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Helpful to 2 out of 2 people

Will you be maxing out the card when you transfer your balances? If not, then go for it. But here are a few tips:

- Make sure the card you're transferring the balances to has a lower interest rate than the cards you're transferring from

- Check with the creditor on the new card to see if there are any 0% interest specials on balance transfers. Some offer 0% for a year.

Transferring all your balances to one card does have its benefits:

- It's nice to see $0 balance on so many cards!

- You only have to make payments to one creditor

- It can save you $$ if you're transferring the balances to a lower interest card

If you ARE going to max out your card with the balances transfer, OR you if don't have any 0% interest specials on balance transfers going on, I highly recommend applying for a low-interest personal consolidation loan instead. I went through lending club and am very happy I did. They were actually recommended for me on CreditKarma. The loan had a MUCH lower interest rate than my credit cards. My credit card interest rates were roughly 13.99% - 18.99%. I transfered one credit card balance to a card with a 12-month 0% interest promo. Then I got a consolidation loan for 7%, paid off the rest of the cards, and am now 2 months away from being 100% debt free.

Benefits of applying for a consolidation loan:

- Lower payments

- Pay debt faster

- Gives you another "type" of credit (revolving vs installment) which helps your score

- lowers your debt to credit ratio, which helps your score

Downsides of applying for a consolidation loan:

- Hard inquiry on your credit report, which hurts your score temporarily

- Average age of your credit goes down, which has a slight negative impact on your score

But in all honesty, the positives and negatives to your score are a bit of a wash - it's totally worth it in my opinion.

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Generally No from a score perspective

So there's two issues here: Will doing a balance transfer be "better" for your credit score or save you the most money. Sometimes they go together, but other times they yield different results.I'll dive into the "nuts and bolts" and then I'll just simplify.

First from a "simplistic" - save money situation: Balance transfers (if you know how to play them right) can save you money. You have to take into account the balance transfer fee (typically 2-5%) - think of this as upfront interest and then the promotional rate (usually 0% if you can qualify). This simplifies the accounts to make one payment, JUST MAKE SURE NOT TO CHARGE BACK UP THE CARDS YOU ARE CONSOLIDATING. On a side note, take a look at credit union cards - my credit union offers a 0% balance transfer fee with a 0% offer - pretty rare in the world. Remember, credit unions are there for their members.

Second from a credit score perspective, certain models can you ding you in two areas 1) when you use over 30% on a specific account AND 2) you use over 30% of your credit line between ALL of your accounts. To further complicate matters, there is a "maxing" penalty in addition to this - so if you are within 30% of your credit line you also get another penalty.  So for example, a credit card with a limit of 5K = you'd get first penalized if you use of $1500 of credit limit because that's more than 30% of your credit line. But you'd also get dinged again if you spent over $3500 since this is considered MAXING you card. If that was your only card, you would then get another utilization penalty because your overall credit usage between all of your accounts if you went above the 30% - this is why having more accounts helps you.

So take your original question and play out this scenario. You have two credit cards, A and B - both have a 5K limit. Credit card A has a balance of 3K and credit card B has a balance of 1K. Currently you are getting penalized for one credit card using over 30% - but that's it. If you were to transfer card A's balance to B, card B would then carry a 4K balance. So your overall utilization across all accounts wouldn't change, which remains at 40% (it was 40% prior to the transfer) - so you're still dinged for this. Now lets look at the each individual accounts, credit card A now has a 0% utilization and credit card B has a 80% utilizaton. So now you'd get slapped with two dings - one for exceeding 30% of your total credit line AND also another for "maxing" because you are within 30% of your credit limit.

Here are my recommendations:

1. If you want to save money and don't plan to apply for any credit before you pay down your balances - hell with the dings to your credit score and do the balance transfer. Ignore the hit to your score, it will recover as you pay down the balance.

2. If credit scoring is important, do a balance transfer with a card that has the higher available credit. If you had a 10K limit on a card, then you could transfer up to 3K without harming your credit significatly. If both are the same, then you're going to take a hit on your utilization - period. One of my methods, that I like it to just apply for a credit card with a balance transfer offer (from a differerent issuer of course) and then never use the card - simply use it to consoldate balances. I got the now-retired Citi Platinum Select card (an easy card to get at the time, no frills, but came with balance transfers), and paid off my initial balance and they kept offerring me more balance transfer offers. I did this for three cards and it got me out of credit card debt. As a benefit, Citi tripled my credit limit and converted this card three times to one with a great rewards program.

3. Only do a balance transfer if you can pay the balance in full by the expiration of the terms - otherwise just pay your card as agreed on both accounts. Credit card companies are HOPING you won't pay your balances so they can revert to the standard APR, since lots of people have the best of intentions but then fail to follow through.

Hope you can follow and hope this helps. Feel free to float any comments my way.

--

My cards: Discover It 12.5K; AmEx SPG 17.5K; Arrival+ World Elite BarclayCard 14K; BankAmericard Cash 7.5K; Citi Double Cash 6.1K; Credit Union Card 5K; Target Redcard 1K; BankAmericard World Points 1K

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