I have a card that is 50% used with 7% interest. The max credit limit on the card is $10,000, and I used $5000. I have another card that is $14,000 and I have $2900 used, but the interest is 14.9%. I want to move the $2900 card to the other card that has a lower interest rate (7%). This will bring the balance close to the max, but the idea is to focus on this one card and bring the balance down as quickly as possible. is this a wise choice? I am looking to purchase a house in 6 months so I thought that this might be enough time to pay it off and keep my score up. My scores are currently in the low 700s.

  • 1
    I wouldn't go doing balance transfers when you're approaching house-buying. Don't give them anything to question! Jul 21, 2015 at 4:22
  • 1
    If you do a balance transfer, why not at least get one that has 0% interest for a year or two?
    – jamesqf
    Jul 21, 2015 at 5:10

2 Answers 2


In the FICO score formula, there are two different pieces of the credit utilization portion of the score: Overall utilization and Per-card utilization. By moving your debt from one card to the other, your overall utilization will stay the same, but your per-card utilization will go up (get worse). According to this article on NerdWallet, this will result in a hit to your credit score.

An important point to remember about the utilization portion of the credit score is that it has no memory. Each month, your current utilization is determined and used to calculate a new score. So as far as your mortgage is concerned, it only matters what your credit utilization is at the moment you are shopping for your mortgage.

Here is what I recommend: Instead of trying to save a few percentage points of interest and then worrying about your score, see how quickly you can pay off that $2900 debt. If you can do it over the next few months, both your overall and per-card utilization will be improved, and your score will rise. More importantly, your debt will be reduced and you'll be losing less money to the bank in interest each month. If you do this before you take out your mortgage, then it won't matter whether you moved the debt or kept it on your old card, because it will be gone.

Even better, I recommend doing what you can to pay off the entire debt on both cards as quick as you possibly can, preferably before buying your house. Develop a household budget that will ensure that you don't add to your credit card debt and can pay off the existing credit card debt as soon as possible.

  • This is incorrect. Utilization is scored at a individual card level as well as total.
    – VBCPP
    Jul 20, 2015 at 22:58
  • @VBCPP You are right. I've rewritten my answer completely.
    – Ben Miller
    Jul 21, 2015 at 3:17
  • I really dislike the FICO score system. The fact that the OP's score will get worse simply by reducing the rate on his debt is unfortunate.
    – Ben Miller
    Jul 21, 2015 at 3:19
  • @BenMiller - Every bit of the FICO score (except late payments) can be argued. And I agree, that someone looking for a better deal, a lower rate, better perks will impact their score. The inquiries, the reduced average account age, the potential utilization if they kill an old card, etc. Jul 21, 2015 at 4:14
  • Solid answer now. As for if it makes sense or not.. Does it matter? If you can accept the assumption that FICO's scoring model is backed by valid research and is an accurate indicator of risk (a large pill for some people), and they see that X and Y indicate Z, then they ought to base your score on that, regardless of how intuitive it is.
    – VBCPP
    Jul 22, 2015 at 2:01

It may go down slightly. While your total utilization will remain the same, one card will show almost 100% utilization (bad)

Here is what I (and Clark Howard) would suggest you do.

  1. Transfer the balance. to the lowest APR card you have (your current plan).
  2. Zero out to 14% card and STOP USING IT! Lock it away where you will not be tempted.
  3. Pay down your 5% card as quickly as possible. This will raise your credit score by lowering your utilization ratio.

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