Credit line increase to consolidate debt?

[xgrrliegermsx]

I am trying to consolidate my credit card debt and am debating whether or not to request a credit line increase on my 0% APR card in order to do so. I have two cards, one has approximately $1,600 in debt on it with 13.5% APR. The other has about $800 in debt on it (1K limit) with 0% APR for life (so long as I make $50 in purchases each billing cycle for the first 12 months. I have successfully done this for the first 4 months.). I recently got a promotion, so I know that I am eligible to request a credit line increase on my 0% APR card. Should I request an increase, even if I won't be able to transfer my entire $1,600 balance on to the 0% APR card? Can this somehow negatively impact my credit?

[MMarquit]

If you transfer a balance, filling up the card close to its max, this does ding your credit score a bit, showing that you are using your available credit. The other thing you have to consider is whether you will be paying down enough each month to keep making your $50 purchase to keep the APR at 0%. You should be paying off this $50 in its entirety, plus some of your $800 every month.

Consolidating the debt might be a good idea, since it will reduce the interest charges you are paying. Then you can pay off the card with the interest rate quickly, and then tackle the 0% card.

Irregardless of what you do, though, you should make paying off this debt a priority. Try and put as much of your promotion money as possible toward paying down your debt. Congrats on your promotion. Now put it to good use: Get rid of credit card debt as quickly as possible and set some money aside for savings.

[xgrrliegermsx]

Thank you so much for your reply! Very helpful.

[financepro]

Originally Posted by MMarquit

Irregardless of what you do, though, you should make paying off this debt a priority. Try and put as much of your promotion money as possible toward paying down your debt. Congrats on your promotion. Now put it to good use: Get rid of credit card debt as quickly as possible and set some money aside for savings.

If this is the case with me, I would go for this one.

Thanks MMarquit,

Really a very good advice. Or I can say you take my answer.

[darryl]

If you have good credit, pay your bills on time, and have a healthy income, lenders may view you as a good candidate for receiving more credit. But does that mean you should accept having access to more credit? That depends.
If you plan to use an increased credit line to consolidate debt at a lower interest rate it could be a good deal. But make sure you keep the total of your debts to less than 30% of your credit line. The more your balance creeps past that amount, the more your credit score will suffer.
However, if getting a credit line increase will entice you to spend money you don’t have, then you may want to skip it. Just call your credit card company and ask to have your old credit limit reinstated. It’s better to continue paying off debts than to run up new charges and end up deep in financial hot water.