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Lane, JD, CFP, MBA
Lane, JD, CFP, MBA, JD, CFP, MBA, CRPS
Category: Finance
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Experience:  Providing Financial, Tax & Business advice since 1986
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If I transfer my higher interest credit card balances to a

Resolved Question:

If I transfer my higher interest credit card balances to a lower interest card (0% interest for 21 mo.) should I close the higher interest ones and how will it affect my credit score?
Submitted: 1 year ago.
Category: Finance
Expert:  Lane, JD, CFP, MBA replied 1 year ago.

Lane :

Hi,

Lane :

No, actually closing the accounts CAN have an adverse affect on your FICO score

Lane :

Also, the amount of credit you have available is a positive ...SO,

Lane :

What I would do is move the balances to the lowest rate card, but leave the other accounts open

Customer:

I really had to think a while about adding a charge to something I'm trying to get paid off.

Customer:

By transferring the balances, I will be opening a new account. Will that affect my score?

Lane :

Ahhh I see, yes that CAN hurt ...I though you were talking about an existing account

Customer:

No. My current cards don't offer the 0% for the 21 mo.

Lane :

typically as long as you don't CONTINUE opening new accounts having available credit on the others will offset, especially if there are several

Lane :

Do you know what it goes to after 21 mos?

Customer:

OK. Yes, it goes to 11.9% APR variable What would that mean?

Lane :

You MAY actually do better just just paying minimums on all but the highest rate card and throwing everything you can at THAT card, and them continuing in that fashion

Lane :

That means it will be tied to some inddex like prime rate or lIBor

Lane :

sorry LIBOR

Lane :

However, after our newest FAD appointment, MANY think that rates are going to stay low for quite a while

Lane :

"FED" appointment

Customer:

Basically that's what I've been doing. I used the balance transfer calculator and it indicated that I would save $2556. in interest. With the current amounts that I've been paying, I could have ALL (3) cards paid off in about 9 mo.

Customer:

by using the 0% interest.

Customer:

I just wanted to find out what my best option is.

Lane :

I think that THAT trend, if you can execute on that, will probably offset any negatives of opening one more new account, (all other things being equal) and saving $2556 in interest is no-brainer

Customer:

OK. That helps me with this decision. Thank you for your assistance.

Lane :

I think your intuition is good here

Customer:

Thanks. I'm learning. (It's taken me a lifetime to get here.) I just needed an "attaboy" from someone with expertise in this field. Thank you again.

Lane :

You're very welcome ... and in terms of the atta boy? I can tell you that you are well above the average here AND you'll reap the benefits over time ... even job searches and insurance underwriting is being tied to credit scores these day

Customer:

Thanks

Lane, JD, CFP, MBA, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 4491
Experience: Providing Financial, Tax & Business advice since 1986
Lane, JD, CFP, MBA and 6 other Finance Specialists are ready to help you
Expert:  Lane, JD, CFP, MBA replied 1 year ago.

Thanks for the rating Cynthia!

If I can help further, let me know,

Lane

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Lane, JD, CFP, MBA
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JD, MBA, CFP, CRPS
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Providing Financial, Tax & Business advice since 1986