Best order to pay CC's off?

[RW771]

Good morning!

I recently made some large payments on my CC's and am trying to figure out what would be the fastest and best order to pay them off. Here is what I have as of right now:

CU Visa card: $5,863/6K @ 8.99%

Chase Freedom: $1,715/3K @ 22.99

Chase Southwest: $3,644/5.5K @ 15.24%

Cabela's Visa: $1,771/3K @ 20.99 %

Home Depot: $1,256/4.5K @ 26.99%

Lowe's: $1,840/6K @ 24.99%

Kohls: $978/2K @ 21.90%

Total: $17,067/$30K (56.88% overall util)

Would it be better to start with the lowest balances first and pay them off that way, or pay off the cards with the highest interest rates first? I'm not planning on using my cards and haven't used them in months since starting to pay them down, so no advice about not using them is needed  Should I start by at least paying some down on the CU card since it's maxxed out? I've held off paying on this one since the int. rate is so much lower...maybe pay it down some, and then continue paying on the rest? Thanks for any input! 

[Creditaddict]

Since your lowest balance are also almost in order of your highest interest rates within 2% I would just go lowest balance to highest and if you can pay off a couple cards in the next month or two I would consider a capital one Venture One and Quicksilver since they are handing out huge credit lines right now and I believe 1 if not both of those accounts come with the 0% and if you apply back to back they will just do 1 set of credit pulls.

[RW771]

Thanks for the input! Yes, definitely aiming to pay off a few cards in full within the next few months, thinking the snowball method might work best now that they're all paid down, close to 50% or less (except 2). Is the Cap One and Quicksilver cards BT cards or just have 0% offers? I opted out of CC offers years ago when I was buying my house and get zero offers. I've tried not to apply for any more cards until I get what I have now paid off, but almost think a BT card would help tremendously, to be able to take the couple hundred $$ I'm paying each month in min. payments and apply them to the balances. 

Thanks again! 

[Creditaddict]

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@RW771 wrote:

Thanks for the input! Yes, definitely aiming to pay off a few cards in full within the next few months, thinking the snowball method might work best now that they're all paid down, close to 50% or less (except 2). Is the Cap One and Quicksilver cards BT cards or just have 0% offers? I opted out of CC offers years ago when I was buying my house and get zero offers. I've tried not to apply for any more cards until I get what I have now paid off, but almost think a BT card would help tremendously, to be able to take the couple hundred $$ I'm paying each month in min. payments and apply them to the balances. 

Thanks again! 

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Might be time to opt back in! (Might be pleasantly surprised the nice 0% BT offers you start getting.

Some of the Capital One Cards offer BT and some just offer a 0% purchase period, you just have to read the offers carefully to make sure you are getting a BT one.

[Anonymous]

I agree that a balance transfer Card and opt in will help the problem. However you won't get approved for a credit card with awesome CL, with a balance on every single account you have. Look into getting a personal loan at 15% or less which will make all of your balances on your credit cards 0. After a few months you will get their balance transfer offers again because your UTIL is back to down to zero. THEN, you can balance transfer your loan, pay that off at 0% and hopefully never run all your cards at once again. Personal loans with Lending Club Avant and prosper will give you a loan with a 660 credit score in the 10 to 15% rate I've had two myself.

[RW771]

Right! I'm just worried my util is still too high to qualify for anything. I haven't checked my scores since paying down my balances, but before paying down $4500 earlier this week, I was in the mid 600's. No negatives on my CR, just high CC util. Think I'm going to opt in and check my scores in Oct. and see where I'm at...any good BT cards you know of?

[Anonymous]

I would take it a step further I would even go higher than 15% interest to pay those Card off, because you will be able to group all of your extra budget money into paying off the loan so paying it off early isn't paying a 19% interest rate or whatever.

Another good thing about installment loan is often and it will increase your score because it helps your credit mix. you're really tipping the scales with credit card revolving balances. A few points here and there can only help on your next credit card application or to secure those balance transfer offers once again

[Anonymous]

I noticed I just noticed you have a credit union Visa Card I would actually apply for the personal loan to the credit union or ask for a limit increase at least whittle away Home Depot and Lowes at the 9% interest in the meantime see what they say tell em what you want

[RW771]

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@Anonymous wrote:
I noticed I just noticed you have a credit union Visa Card I would actually apply for the personal loan to the credit union or ask for a limit increase at least whittle away Home Depot and Lowes at the 9% interest in the meantime see what they say tell em what you want

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I didn't apply for a personal loan with the CU, but did request a CLI a while back and was denied (I'm sure due to high util). I didn't think you could pay off personal loans with BT cards? When you say 9% interest, do you mean paying down the balances on HD and Lowe's to 9%? Because they both are in the mid 20% range :-(

[TheConductor]

I'm a firm believer in paying the highest interest rates off first.  Especially with a large total balance like yours, you can save a lot of dollars in finance charges by attacking the balances in order of highest APR.

This approach may not be the most ideal for your FICO score in the short term, but it's the most ideal for retiring your outstanding debt as soon as possible. And in the long term, nothing is better for your FICO score than getting back to zero debt and spending within your means.

One caveat here is to check your statements for each of these cards and make sure that your entire balance is at the interest rates shown. If you've done any cash advances, for example, you may have some partial balances that are at a higher interest rate than the purchase APRs you have listed here. Or you may have some 0% balances from promotional periods. If so, split those balances out as well and treat them as separate efforts.

I also second the recommendation to look into 0% balance transfer options or (more likely given your current profile) a personal loan for debt consolidation. You can also ask your creditors for APR reductions.

Anything you can do to reduce the APR on any portion of your debt will help you in the long run.

I know a lot of people advocate the "snowball" method of paying the lowest balances off first. I don't disagree that there is a powerful psychological snowball effect when you start crossing creditors off the list one by one. But I also believe in the powerful effect of a different snowball: a financial one. When you attack the high APRs first, you are getting the maximum reduction of your total minimum payments each month, which means you can put more of your payments toward actually reducing the debt instead of just keeping it from going delinquent. That builds more and more financial momentum toward eliminating the debt.

I consider the financial effect more powerful and more satisfying to me than the psychological one, but your temperament may differ so by all means do what is best for you. The aim above all is simply to get. it. done!