PAYING DOWN CREDIT CARD DEBT

[Anonymous]

Currently, I am trying to improve my credit score for the purchase of a new home.  I have no past due or collection accounts.  My problem is I have very high credit card balances.  One cc has a balance of $20,000 with a limit of $25,000 the account has been opened for 10 years the other has a balance of $6,000 with a limit of $10,000 this account has been opened for 2 years.  I'm having a hard time paying the balances down.  Which will improve my score the most?  Paying down the 2 year cc account or the 10 year cc first?  I am unable to do both.  Thanks!

[Tons_of_Debt]

What are the interest rates on these? Minimum payments?

[Tons_of_Debt]

How much *can* you pay a month?

[Anonymous]

-Take what you can pay and split it in half. That's what I did I had 3,000.00 and I am only 19.

Example
Availble cash to send to CC's. $200.00
Total CC's. 3
200.00 / 3 = 66.66
Send 66.66 to each CC.

That's what I did and it help my CR greatly. The balance on a 3 Cred. BRU. were around the same.
NEVER GO UNDER THE MIN. PAYMENT.

[Anonymous]

Minimum payment on the $20,000 credit card balance is $323/mo with an interest rate of 7.9%.  I pay $423 but I also charge gas expenses when needed.  Minimum payment on the $6,000 credit card balance is $100/mo with an interest rate of 9.99%.  I pay about $150 per month.  I can afford an  additional$100-$150 per month.  Which card should I pay the additional to?  I've heard that paying down old debt isn't as good as paying down new debt.  Is that true for credit cards with high balances?   

[Anonymous]

Thanks.  That's a good idea..

[CodeMonkey]

To be honest - I would probably start paying down the $20k as fast as I could.

I know it's currently at a lower interest rate - but CC companies have been known to "rate-jack" customers once they have them on the hook for a large sum.

Paying 28.99% on a $20k debt is just not a good time - I've been there, heh. The kicker is that with extremely high util% you'll have a rough time getting a new card to transfer the jacked balance to - stuck between a rock and a hard place.

Either way, I would for sure stop charging more on your cards each month until you get those balances down.

Good luck with everything!

[Tons_of_Debt]

Definitely pay down the larger balance... even though the interest rate is lower, you're paying more in interest given the higher amount.

[Anonymous]

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@Tons_of_Debt wrote:

Definitely pay down the larger balance... even though the interest rate is lower, you're paying more in interest given the higher amount.

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But you're getting less bang for your buck by making a payment on the higher balance/lower interest card.

Despite that, I would make the extra payments on the $20,000 balance card. CodeMonkey is right. Getting an interest hike on a car that you owe 20K on can make the difference between paying it off and going off the rails. Say they raise it to 15% or 22%?

I'd say pay it down to 50% and then switch off and pay off the higher interest rate card.