I've got pretty good credit at the moment. I have an AMEX Gold and an AMEX Platinum Business card, both in perfect standing. I had an AMEX Blue card that had a $7500 balance, and is down to about $3800 (paying it off hasn't been as fast as I've wanted, due to some unforeseen expenses). Anyway, I have two Discover cards that are completely insane (both are 28% APR, with both cards totalling about $8300). What's a good credit card to transfer that entire balance to? Or is there some other option to move that balance elsewhere? At this rate, anything is better than that nasty 28% APR. But obviously 0% APR for 12 months would be ideal. I did get an offer for a Citi MasterCard that offers 0% APR for 12 months.. maybe I could call them up and get them to allow the full $8300 to transfer over. Thanks.
Keep in mind that you don't have to reposition your debt all at once. Each increment of shifting a chunk to a lower rate produces an incremental improvement to your position and cash flow. If you can transfer to a new account, or with an increase in credit limit, you also expand your available credit, improving your debt to available credit ratio, and increasing the likelyhood of additional offers on improved terms. When saddled with some debt at high rates, getting the first improvement in terms is the most important. Successive shifting after that may get easier. But keep in mind, that although your cash flow is improving from reduced interest cost, make sure it goes to paying down principal. In addition, until your utilization and outstanding debt are reduced, you are more vulnerable to any negative marks on your credit.
OK, so let me ask you this.. which route do you think I should go with this: 1) Apply for a Citi credit card and try to get the highest limit possible, and transfer my Discover(s) to it (or as much as will fit). 2) Use my existing AMEX Blue account ($3800 out of $7500 limit) and try to increase the limit on it and transfer as much as I can to it. But you're saying I should not fill up a card to the credit limit, right? That it tarnishes one's credit?
You have balances you are carrying at absurd rates. You therefore have 3 goals: 1) Get those rates down, presumably by BT somewhere else, to directly improve your bottom line. 2) Improve the appearance of your credit profile, to ensure better terms in the future going forward. This requires that you make sure you have no negative items, and that your available credit is much larger than any balances you are carrying. 3) Maintain good credit relationships with all creditors where you are carrying balances, to avoid this problem in the future. This may require that the balances you carry with a given creditor never exceed a reasonable fraction of your available credit with them. Why has Discover raised your rate to 28%. Have they said? Is it due to specific negative information from other creditors on your reports? One or more late payments to Discover? Or is it due to high balances on the Discover accounts only, or your total debt to available credit ratio? The reason it matters, is that as you start taking steps, removing balances from Discover, how fast will Discover be likely to restore more normal terms, or will you be using their accounts only for improving debt to available credit, for score purchases, with your debt and normal monthly card usage riding on cards with other creditors.
