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Credit Card Applications » Questions » User Questions » Balance Transfers » I just transferred 3 credit card balances totaling $7,797 to an approved credit line of $9,000 ...

I just transferred 3 credit card balances totaling $7,797 to an approved credit line of $9,000 with US Bank (one of those balance transfer offers of 0% for 20 billing cycles). I just read that you should only be utilizing 30% of the total credit limit of a credit card so as not to adversely affect your credit score. Well, obviously I’m utilizing most of the credit limit of this new 0% card, BUT I’m also paying off those other 3 credit cards so those would have 0% utilization of their balances… so isn’t that a good thing also? Wouldn’t that help my credit score? This is the first time I’ve ever done a balance transfer through an offer like this and hate to think I made a terrible mistake for my credit score. What are your thoughts?

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Leo Zhu

Getting a new credit card and transferring balances will change your credit score in a positive or a negative way. Which way your credit score will be affected depends on many factors. Of course the utilization ratio is one of them. When your FICO score is calculated the overall utilization ratio and each card credit utilization ratio are taken into account. If you do not close your old credit cards and continue making minimum payments on them (if there are any), it will help you keep your credit more or less at the same level. Paying off the transferred balances will help you build good payment history provided you do not miss payments. Payments history makes 35% of your FICO credit score, so you will be able to improve your credit. You can use our credit score simulator to see how this or that financial decision can affect your credit score. 

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