Hello everyone. I'm 20 years old and I have beautiful credit. I have my BMW lease, my AMEX, my sprint, and Cable bill on my credit. It is established and pretty high from a teenage gas card my parents got me and paid off in full when I was 16 until 19. My AMEX bill is 15,000 and my limit is 36,000. I'm awaiting almost 12,000 dollars in cash from a family member to pay this off in the summer; however, I received an offer in the mail today. It says Chase Platinum Master Card, 0.00% APR UNTIL August 1st. Then fixed 9.99% thereafter. So 15 months at 0.00 including all purchases AND balance transfers. Sounds really good since I'm paying 200+ in Interest fees from AMEX. My amex rate is around 12% because of my good standing with them. I have never been late on anything in my credit profile. I was thinking about transferring the total balance from the AMEX, and just keeping it open at 0. What are you guys thoughts about this? Negative? Positive? Can you guys tell me if I should make this transition, it sounds really good and will save me a lot of money. Any feedback would be awesome. I don't want to hurt my credit and am doing so well, just this interest really sucks. I'm hearing mixed things from family members so I decided to ask the best; you guys! Thanks!
From a strict financial position, your best option is to transfer the $15,000 to 0%. You should take the "savings" in interest, and use that to help pay down the balance owed. Opening a new credit card will impact your credit score a bit (negatively), with the "hard inquiry" and a new account lowering the average age of your credit history. But...you will save a good amount at 0%, however...read the fine print, and make sure there are no conditions or clauses that could be trouble. Also remember your purpose for this card, do NOT use it for any purchase that you will not pay off monthly. Do not close the AmEx card, keep this open to help your credit. You may want to keep it as an "emergency" card. If you do not intend to take out any other new credit in the near future, I would say it makes sense to transfer the balance. Just make sure you have the discipline to keep the AmEx at $0, and you pay the Chase card down. As a note, your credit utilization (credit used divided by credit available) $15,000/$36,000 = 42%. For credit scoring this is a bit high, the average is 36%-40%. You could improve your credit score greatly by paying this balance down. Paying down the balance quicker will more than make up for opening a new account on your credit report. So, in summary: 1) Get the Chase card, (after reading all the disclosures and Terms & Conditions), 2) Transfer your AmEx balance to the Chase card, 3) Use interest savings to accelerate paydown of the balance, 4) Be careful not to use the cards and run up higher balances.
sounds good, thanks for your feedback and information. if I can i will try to take a pic of the terms and conditions and show you guys.. anyone else have their .02 about what I'm about to do.. see the thing is I use my card here and there monthly to pay for things like grociers and gas during the month.. its around 400+, is this ok? let me know thanks i really appreciate your reply!
Make sure the debt doesn't drown you. Getting in debt is easy, but watch out, your friend today (creditors), just might become your adversaries tomorrow.
Using the card is good, as long as you pay it off monthly. But use discipline to make sure the debt level doesn't creep up on you. It is easy to do.
now my other question is how will i know that they will approve me for at least a limit that will cover the balance transfer with this new card? i just dont want to waste my time and get hit with a hard check and they say oh your limit is only so and so amount.. thanks
The credit limit will depend upon your income, your credit score and other debt you have accumulated. I would call for the application process, and ask up front what the expected credit limit will be. I would also tell them what you desire for a credit limit. It never hurts to ask. Explain that you will use the balance transfer option, and specify the amount you will need for it.
