Consolidate Credit Card Credit Limits

I called Chase last night to consolidate credit lines on some cards that I no longer use so I can take advantage of 0% APR offer from the Chase Freedom card, though the offer is only good till the middle of November (I made a mistake about the length of the introductory period in my previous post when I said it was 12-month).

The Freedom card currently has a $11,000 credit limit. To make the balance transfer more profitable for four months (from now till it expires in November), I need a much larger amount. So I decided to move credit lines from other three Chase cards (Flexible card and Sony card) to the Freedom card without closing them. In this way, I get the credit line I want and still keep the credit history of the old cards.

The consolidation process went smoothly for the first two cards, all but $500 on each card was moved to the Freedom card. When the CSR was trying to do the same on the Sony card, she told me she wasn’t allowed to make the move and instructed me to call the lending and loan department during the day time. So I called again this morning and asked why last night’s attempt failed. The explanation is since the credit limit on the Freedom card will go over $50,000 if I add the credit line of the Sony card to it, I will need to get a special approval from the lending and loan department. To save myself some time, I chose to only go to $50,000 and the CSR was able to help me complete the consolidation.

So how much I can profit from this huge transfer? The total amount I’d like to borrow will be $49,500 and and half of the money will go to my IGoBanking account (5.30% APY) and the other half will be deposited into FNBO Direct (6.00% APY till September 18 and 5.24% afterwards). Since the minimum monthly payment for a balance of this size will be around $600, I will have about $47,000 in my bank account throughout the 4-month period. After the $75 on-time balance transfer fee, I could pocket about $750 worth of interests.

Worth the effort? I think so!

After the balance transfer ends, I will have to redistribute the credit line as having a card with $50,000 limit in my pocket all the time (I want to use the Freedom card for the 5% rebate on gas and grocery purchases) won’t make me feel very easy :) .

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10 Responses to “Consolidate Credit Card Credit Limits”

  1. Kujimon |  Jun 29, 2007 at 5:03 pm

    Sun,

    How do you get the money into your Savings account? Do they count writing a check to yourself at your BOFA account as a balance transfer?

    Thanks

    Kuj

  2. ispf |  Jun 30, 2007 at 11:47 am

    Hey Sun,

    $750 for 4 months is sweet! Congratulations!

    I started out with about $55K last year. When the 0% offer was up, I decided to fold it into another offer for this year. If you chose to go this way, here are some tips -
    * If possible move the balance to your wife’s credit cards. Since your utilization is high at this time and hers may not be, she has better chances of getting the application approved.
    * Request for a balance transfer in the credit card application itself. I have noticed that when I apply for a card without a BT request, my approved credit line is around $10K. But if I apply for a card with a BT request of around $25K, I usually get approved for $20K+ lines.
    * Call up and check if any of your existing credit cards will offer a 0% balance transfer, so you can avoid opening a new account.
    * Send more than the minimum payments – this is supposed to look good on your credit history. Apparently, even $5 more should be OK, since the exact amount is not listed. This will help your case, if you choose to open a new account in your own name.

    It makes me feel good whenever I read about someone making money from 0% BT game :) Finally, payback for the credit cards that made money from me when I was still an ignorant oaf!!!

  3. Sun |  Jul 01, 2007 at 10:17 pm

    Kujimon: For this transfer, I just gave Chase my BoA account number and they will transfer the money directly to my checking account. Many times before, I asked them to send me a blank balance transfer check so I can write it to myself and deposit it.

    ispf: Thanks for the information and the tip to get a higher credit limit is very useful. I never bothered to fill out the balance transfer part when applying for a card, even though the card is for balance transfer.

  4. John |  Jul 03, 2007 at 11:44 pm

    Sun,
    When you consolidate the credit limits from various cards do you often run into situations where the high balance (highest amount ever owned on the card) is greater than the lowered credit limit. Would that not appear as if you have exceeded your credit limit?

  5. Sun |  Jul 04, 2007 at 1:08 am

    John: Yes, if I lowered the card’s limit to $500, then some charges in the past definitely exceed this new limit, but I am not so sure on how this will have a negative impact of credit score/history. Did you have any information about this issue? If so, please share it with me. I need to do some research on this, but I doubt it will mean anything.

  6. John |  Jul 04, 2007 at 1:35 am

    Hi Sun,

    My friend who plays the 0% CC game did mention that it affected his score and report negatively; but the effect was temporary. However in one case he was unable to reallocate the credit limit back to the original card after he paid the debt and this has caused a permanent “negative” record on his credit report. So while he still plays the game, he no longer moves the credit limits.
    That is why I was curious in checking if any others have experienced similar negative effects.