First, this is my first posting to FW (although I have been a long time reader). I have read tons of other people's AoR with 0% BT, and I know there are a lot of answers out there, but I have a few I cannot find and want to address specifically. First my situation:
Age: 22 No existing debt (no student loans, no mortgage, no car loans) Credit Score: 759 (only one inquiry) as of May 28, 2007
4 Existing Credit Cards (all have $0 balances): 1)BoA (CL =47500); 2)AMEX (25000); 3)BoA (10,000) 4)Citi (5500). Note, the first three cards are in my name but were issued adjunct to my fathers line of credit,hence thier higher Cl, while the Citi card is my daily use card for gas/grocerys/beer and I have never tried to raise the Cl. I know my credit score is only what it is because of my Boa/AMEX card's higher credit lines. Also, my oldest credit card = BoA (47500) for 5 years and 1 month.
I am graduating from college in two weeks, will have a summer job (will make about 6k during summer), then I am off to three years of law school working only during summers. I have zero debt (no student loans from undergrad, received 1/3 my law school costs in scholarships, and will use Stafford loans (20k) to pay for the rest each year. When I get out of law school, I'll be in debt around 30k after summer earnings. What I want to do is get all the 0% BT cards I can, put them in ELOAN or EmigrantDirect, and do the standard credit card arbitrage (I have already found several cards, thanks posters). Here are my questions/concerns:
1)What can I put down for Household Income? As I am a student, my income will consist of about 7k job earnings, 11.5k scholarships, and 22.5k government loans. Am I only allowed to include these things for a total of around 40k (do loans even count?), or can I include my parents income too on the application? My dad makes in the mid 100k range and together, mine and his incomes will be close to 200k. Also, for tax purposes, my dad still claims me as a dependant on his tax form (if this matters) and I will be living at home for the next 3 months until I move to an apartment for law school. In theory, he would help me with debt if I needed it, but in reality he would boot my arse out the door. I want to include his income so I can get a higher CL, but don't want to commit fraud (bank fraud, mail fraud, wire fraud, ect) by drastically overstating my income. I would like to get in writing from the credit card companies that this is ok to include his income, but first I want to hear what the FW community has to say.
2)As I am planning on being an attorney, I do not want to do anything illegal or commit fraud. Should I take any special steps? What should I look out for?
3)What can I expect in credit lines with respect to what I said above? It seems crazy to me that I would be able to get 100k in 0% BT credit, but the more I look at other's results, I'm beginning to get high expectations. I am planning on getting about 5-7 cards (more if this process works smoothly in the future).
4)Should I request BT on the application or wait? I know I need to look at the terms on rates and when I can do this BT, but will one way or the other help my CL? Should I just flat out say I want a 25k or 50k BT and see what happens?
I tried to be breif with this first post. Look forward to hearing what you have to say and participating in FW threads!
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It looks like it could be easily done since you have such exquisite credit history and current credit lines are big. First of all, if you live at home you can report your dad and mom's income, yet the companies may ask for proof before granting you huge credit lines. Big advantage for me as well, I can report 200,000/y income while being a current student myself.
IMHO I would say apply for more than just 5-7 cards. If you are already going to take a hit like that on the CR I would try for at least 15-20. I can't say from experience, but I have been reading myself for a while and that seems like a safe number as long as they all go out the same day.
I currently have 50k out in BT money these are a few of my quick stats: Oldest account: 1year 8months Credit Lines: 130k Credit Score was 757 when I took out all the accounts and now has dropped somewhere near 660 because of the high utilization of 2 cards and all the recent credit card apps I have filled out (8 inquires in 3 months I think)
I don't know definitively, but you probably shouldn't count scholarships as income (do you get taxed on them? If so, they're income).
If you're living at home, then your folks' income generally counts as "HHI".
I think the primary question would be if an AOR will affect your stafford loans in any way. Does your credit score matter? Will having a large amount of temporary assets (and corresponding debt) matter? I don't know the answer.
But if your student loans are already locked up, then I saw go for it!
- If there is any possibility of doing credit line reallocation, or BT delaying, then I generally recommend not requesting a BT with the app, so you can get your ducks in a row before you start firing off transaction anywhere. While there's a chance that doing a BT request with the app will increase the odds of getting a large CL, it's not usually that significant.
- Your results on an AOR would probably be all over the map, with some really great results and some paltry ones.
I have indeed decided to do a lot more offers than originally planned. I'm looking around 15-20 right now in total and I will be doing them all on a Monday morning to hopefully minimize credit inquiries reported. First a few more questions:
1) Is 89% the magic number to stay under per card utilization? 2) What overall percent utilization for all my credit cards should I stay under?
To markkundinger: I agree that loans should not be included in HHI. However, scholarship money is a form of income although it is not taxed. Also, eligiblity for stafford student loans does not matter about FICO or credit history, they are basically guaranteed and I have already been approved for them (though they will not be issued to me until August; this is another reason I want to do my AoR before August becuase the student loans are reported to my credit history though and will show the credit card companies I have more debt).
I called Discover about the HHI. They told me that "if I live at home and my parents would be willing to help me with debt if the need arose, then I can include thier income." It sounded like a very loose basis for determining HHI, which is very good. I am going to call all credit card companies I will apply to and ask them these questions first and get thier names and employee numbers just to be safe (I have made a informal, nonchalant questioning technique where I find out all the specifics from the companys without directly pointing out my intentions).
Finally, I think you are right about waiting for the BT until after being approved. I am asking first how long I have to get the 0% BT rate, but I do want to get approved for everything in one day if possible.
As I'm going to be in school for three more years and will not be buying a house for at least 4 years. I see no reason not to go crazy with this and get as much 0% BT credit as possible and who cares about the temporary credit rating dive. It will go up in time from the inquiries and when I pay back balances. It may even be higher than it was when I started at the end. Plus, I will have a LOT of existing credit that I assume I can likely reallocate to new cards for a "easy" second round of AoR (with less cards total but with higher limits due to rolling over limits".
I have to be honest, I'm pretty excited about this whole thing. I just discovered this process 4 days ago and am ready to go! If I can get 125k or more CL and do this during law school, my earned interest will cover an entire year of tuition at law school! Not to mention it will be tax free for me due to low wages/tuition deduction/student loan interest deduction/standard tax deduction!
MikeR397 said:I have indeed decided to do a lot more offers than originally planned. I'm looking around 15-20 right now in total and I will be doing them all on a Monday morning to hopefully minimize credit inquiries reported. First a few more questions:
1) Is 89% the magic number to stay under per card utilization? 2) What overall percent utilization for all my credit cards should I stay under?
To markkundinger: I agree that loans should not be included in HHI. However, scholarship money is a form of income although it is not taxed. Also, eligiblity for stafford student loans does not matter about FICO or credit history, they are basically guaranteed and I have already been approved for them (though they will not be issued to me until August; this is another reason I want to do my AoR before August becuase the student loans are reported to my credit history though and will show the credit card companies I have more debt).
I called Discover about the HHI. They told me that "if I live at home and my parents would be willing to help me with debt if the need arose, then I can include thier income." It sounded like a very loose basis for determining HHI, which is very good. I am going to call all credit card companies I will apply to and ask them these questions first and get thier names and employee numbers just to be safe (I have made a informal, nonchalant questioning technique where I find out all the specifics from the companys without directly pointing out my intentions).
Finally, I think you are right about waiting for the BT until after being approved. I am asking first how long I have to get the 0% BT rate, but I do want to get approved for everything in one day if possible.
As I'm going to be in school for three more years and will not be buying a house for at least 4 years. I see no reason not to go crazy with this and get as much 0% BT credit as possible and who cares about the temporary credit rating dive. It will go up in time from the inquiries and when I pay back balances. It may even be higher than it was when I started at the end. Plus, I will have a LOT of existing credit that I assume I can likely reallocate to new cards for a "easy" second round of AoR (with less cards total but with higher limits due to rolling over limits".
I have to be honest, I'm pretty excited about this whole thing. I just discovered this process 4 days ago and am ready to go! If I can get 125k or more CL and do this during law school, my earned interest will cover an entire year of tuition at law school! Not to mention it will be tax free for me due to low wages/tuition deduction/student loan interest deduction/standard tax deduction!
Whoa cowboy - read up on some adverse action threads first before you pull the trigger.
careful there buddy. remember, you need to PAY MINIMUMS on cards that you take.
on $40k/yr law school tuition, that amounts to $800/month.
trying to pay that with more 0% CC loans gets you into an uncomfortable spiral. this is highly unrecommended, because the cardinal rule of AOR is that you can pay back all debt if a bank tries to screw you.
btw, what law school you headed to? T14, something close, or TTT?
Tolik: I'm headed to Ohio State Moritz Law School which is 31st in country I believe. It is solid and cheap for in-state residents (2006 was 17.5k tuition). Also, I am not using ANY of this 0% BT money for anything but earning interest, period! I am making a separate savings account at FBNO Direct (6% APY interest until Sept. 28 2007) and depositing the money there. I will set up all the credit cards to automatically collect the minimum payments from this new savings account, and once everything is up and automated, I will sit back and watch the interest climb until I pay off the balances in full at the end (and prepare for AOR round 2 hopefully!)
I will send in between 15 to 20 applications (2/3 to each card company). My goal (hopefully conservative and achievable) is to get 105k CL form 0% BT, take 93k of the available 105k and stick all of it in my shiny new savings account and watch it grow. This way my total credit utilization of new and old cards will be less than 50% and I won't have any single card over 89% utilization. It will also allow my savings account to grow with interest and still be completely FDIC covered for the whole time.
Now, if I get luckey and get over 105k in CL, then I'll simply open up a second savings account at a different bank (to be FDIC insured) such as EmigrantDirect(5.05%) or ELOAN(5.25%). I'll just link the credit cards I deposited in the second bank to deduct minimum payments from there. This would be pretty sweet, but if I get 105k CL from my apps, I'll be a happy customer.
If you're living at home, then your folks' income generally counts as "HHI".
If my parent's home is good enough for my state income taxes, in-state/out-of-state tution, the federal government (FAFSA), voting, driver's license, car registration,....
I think including your parents is a lot more valid than including your 4 roommates at your physical local address.
I would say even if you don't live with your parents they can be part of your household. Especially if you receive any material support from them.
I know it will hurt my credit in the short term. But if I stop, it should rebound within 1.5 years right? As I will not be getting a car or house in the next 3 years, having a 759 credit score doesn't help me at all. Isn't there a good chance that if I do this AoR successfully for 2 years, then quit for 1.5 years, my score will be higher than 759 due to my larger credit limits and very small utilization when they are paid off? Not to mention all the payments I will recieve credit for.
Sidenote: Yes, I plan to stay in Ohio. I like Columbus or Cincinnati. Both cities are plenty big to offer solid job opportunities and neither are so big as to include the headachs of giant cities (ie crazy traffic jams and ridiculous housing/living costs). I've never liked extremely large cities to live in, only to visit on vacation.
Another thing...you should be careful about setting up automatic electronic payments to the credit cards from a savings account, i.e. the limit of 6 transactions (transfers or withdrawals) from a savings account per month. You might want to check that out since the bank could shut you down for excessive transactions.
Good info about max bank transfers, I hadn't thought of that as my banks do not have that policy. I was actually planning on pulling the money in by having each credit card subtract the money from the bank, rather than having the bank push the money out (assuming this options is available).
How long, if I apply online, will I know about my Cl's being issued? I really don't want to end up with 10-15 5k credit lines that are going to drastically drop average credit line for my credit score, not to mention profit opportunity? Do they tell you right away in an email usually or do you have to wait a few days? Will having 15 smaller Cl's hurt my score in the long run? I assume I could always realocate them later and close the smaller Cl ones. Anyone know?
MikeR397 said:Good info about max bank transfers, I hadn't thought of that as my banks do not have that policy. I was actually planning on pulling the money in by having each credit card subtract the money from the bank, rather than having the bank push the money out (assuming this options is available).
How long, if I apply online, will I know about my Cl's being issued? I really don't want to end up with 10-15 5k credit lines that are going to drastically drop average credit line for my credit score, not to mention profit opportunity? Do they tell you right away in an email usually or do you have to wait a few days? Will having 15 smaller Cl's hurt my score in the long run? I assume I could always realocate them later and close the smaller Cl ones. Anyone know?
1) Even six figure income earners with million dollar net worths (Dolmar and Scott) still occasionally get $10-$15K credit lines. You have done very well for yourself at the age of 22 but I think you are setting your sites to high if you expect $25K lines across the board.
2) The fact that the accounts are new will hurt your credit score. Your utilization, if too high, will hurt your credit score. However, as long as the utilization is equal, it doesn't really matter if your CL is $500 or $50,000 in terms of your credit score. As far as I know, there is no such thing as an "average credit line" credit score factor.
The newness will "age" and in 10 years you'll be glad you had those cards. The utilization ding will go away the month you pay them back. The downsides are temporary, I wouldn't let the fear of $5K credit lines stop you.
MikeR397 said:Good info about max bank transfers, I hadn't thought of that as my banks do not have that policy. I was actually planning on pulling the money in by having each credit card subtract the money from the bank, rather than having the bank push the money out (assuming this options is available).
Q]
I think all banks limit "savings account" transactions. To get around this just set up a transfer to a checking acct once or twice a month for all the minimum payments that you need to make. Simple solution and you will not "loose" much in term of interest income if done right.
My preference is to have an automatic payment setup that arrives several days before the due date. In case something happens you will have time to react. Also a lot of checking accounts with automatic bill pays will guarantee a payment to be received as long as it is scheduled to arrive at least 2 days before the due date.
In any case read all the fine print on every account that you have. The 5 minutes it takes you can save a lot of headaches down the road.</blockquote>
MikeR397 said: How long, if I apply online, will I know about my Cl's being issued? I really don't want to end up with 10-15 5k credit lines that are going to drastically drop average credit line for my credit score, not to mention profit opportunity? Do they tell you right away in an email usually or do you have to wait a few days? Some tell you instantly and some you wait. One thing I learned from my AoR was to ask for increase right away on any CL I felt was to low, This way you do not get a second pull. Problem is it wont work for you as they will want to see 2 years of taxes and bank statements. You wont be able to send in parents income and yours alone would get you in trouble. So it's up to you to decide if you can deal with a bunch of low limit cards
NDogg said:Another thing...you should be careful about setting up automatic electronic payments to the credit cards from a savings account, i.e. the limit of 6 transactions (transfers or withdrawals) from a savings account per month. You might want to check that out since the bank could shut you down for excessive transactions.
The way to set it up is to push from the online MMA savings accounts into a checking account and setup CC bill pay to pull from the checking account. The best way to do it is once a week (on Wednesday) for the push from MMA savings to checking and set the CC billpay schedule to pay the Friday before the due date. (Friday CC bill pay will be debited on Monday at earliest.)
First, set up the CC bill pay schedules. Second, determine amount needed for a week. Third, schedule the ACH push transfers from MMA savings to checking.
Thanks for the good advice, it saved a lot of headach. I called FNBO and they said I have a 6 transaction limit, so I would have been only able to pay 6 cards though them (including if the cards pull the $). Then I called EmigrantDirect and was informed that although they let me have a (only one now) credit card pull money from the account currently, they will not allow any more and will soon not even allow me to do this one credit card pull at all (I can only transfer money to/from bank account).
I am planning on doing the AoR on Monday. I will try to get all credit card payments due on a Tuesday. I plan to use FNBO at 6% (at least until October), have it automatically transfer enough to cover the minimum payments on the Wednesday before payment date to my checking account. Then I'll have the credit cards pull the money from my checking on the Friday before the payment (actual payment date next tuesday). That should be sufficient to cover all transfer delays. Opinions?
Hopefully, if I can get over 100k, I'll either have to set up another FBNO acct (joint or change beneficiary to be FDIC insured, i have to look into this more) or use my EmigrantDirect account at 5.05% interest.
I did call Discover, National City, and talked with BoA online, and I got 4 different people (and twice in writing) saying that I should include my parents income and list my address as my home address, not college address. So I assume I am covered there. Since I'm listing 160k HHI, I hope that the average CL on each card will be 10k, which will result in 200k total CL (20 applications, see below), of which I will utilize 89% of (maybe less to keep total credit utilization under 65%). But again, I really don't care about credit score for the next three years so why not utilize a lot of the BT money.
Below are the 20 applications I plan to do on Monday. I will do a max of two from each company and start with all the 12 months cards then get into the 6 month cards if all is going well and I'm still getting approved. All cards are 0% BT, all 12 month terms(except Citi with $0) have a $75 max BT transfer, and half 6 month cards have $0 BT fee up to a $75 fee at fifth third (but I've already banked there for a long time and they will be easy).
Number Card Term 1 Citi AT&T Platinum Card 12 months 2 Citi Driver's Edge Platinum 12 3 Disocover More 12 4 Discover Miles 12 5 Chase Sony Platnium 12 6 Chase VW Platnium 12 7 First National Platn. Visa 12 8 First National Rewards Plat. 12 9 HSBC GM Flex Card 12 10 HSBC Platinum Rewards 12 11 BoA NFL Card 12
12 BoA Money Return 6 13 National City Visa 6 14 Fifth Third Rewards Master 6 15 Fifth Third Platnium Prime 6 16 Barclays/Juniper B&N 6 17 Barclays/Juniper Racetrac 6 18 Emigrant Direct 6 19 AMEX In: Chicago 6 20 AMEX In: NYC 6
I truly hope that you can stay on top of your payments/transfers every month given you'll be pretty busy with law school. You can't afford any mistakes.
I just have an uneasy feeling about someone who is a long time reader but first heard about AORs less than a week ago and is ready to dive in with both feet. Nothing personal against the OP, I wish you all the best.
Thanks for the concern, however I was vague with that "First heard about this process" comment. I've seen the BT threads, but they never seemed to apply to me and I never read them seriously becuase I thought my credit score was too low (I checked for the first time in 3 years a few days ago and found out it was 759, which gave me the idea to rexamine the BT threads again). I also thought that applying for more credit was a bad thing (only to become properly educated after reading more). Lastly, before deciding to do law school, I thought I would be wanting to buy a car/house soon and did't want to hurt my credit for that. I don't start law school for 3 months and by then the process should be pretty automated. If theres an issue, I'll just pay back the balances beforehand (but I would likely never do or have to do this).
Two of my undergrad majors are Finance and Economics and I catch on with Financial matters pretty quickly. Now that I've done some heavy reading under much more of the FW Finance section, I'm hooked (and better educated). Thanks for everyone's inputs toward my AoR education.
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