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Question By
CB0225

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Will a balance transfer impact utilization?
I currently have a card with a 1500$ balance on it, using 100% utilization. If I transfer it to another card with a 5K limit, will my utilization improve or will it stay the same? I'm unsure as to whether utilization is looked at across all accounts or on an individual card level.

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Yes, your score will improve with you moving the same balance from one low limit card to other one with much higher limit. They look at both your overall debt to credit ratio and individual card's ratio and take which ever has highest ratio as your credit utilization. Which to me the credit scores at times are artificial, you still owes same amount of debt, it just looks better.

Reply by
CB0225

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Thanks for the response. That makes sense and is kind of what I thought it would be but wanted to be sure. Unfortunately, a 1500 dollar balance on a 5K card is still 30% utilization but I suppose it's better than 100% haha. I guess I could leave 300 on the 1500$ card and have 20 percent on that and 25 percent on the other. Unless that would do more harmt han good. I'm probably overthinking it.

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Reply by
JohnnyRain127

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Yes spread it out between cards to make the percentage as low as possible, if you are after better scores, but score don't mean much if no one is looking at it..ie, if you are not going to apply for line of credit any time soon? Then it doesn't matter what score you have. But if one card has lower interest rate than other or none at all? Then don't let the utilization hinders you from transferring it, to be able to pay your debt down/off quicker wights more than lower scores.

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