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Paying Off Credit Cards

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Anonymous
Not applicable

Re: Paying Off Credit Cards

Here are two scenarios.  Whichever you choose (even if not mine), you're UTL will go from 74% to 20%, your available credit will go from $24k to $74k.  With scenario #1, you'll pay all of your cards off except for two (which have the highest balance).  With the second scenario, you'll pay most of the high balance cards except for 6 cards.

 

SCENARIO #1

CardCurrent BalanceCurrent LimitAvailable CLCurrent UTL %PayNew BalanceCurrent LimitAvailable CLNew UTL %
PayPal $8,500$10,000$1,50085%$0$8,500$10,000$1,50085%
Discover $7,200$8,500$1,30085%$0$7,200$8,500$1,30085%
USAA $5,900$7,000$1,10084%$2,725$3,175$7,000$3,82545%
lowes  $5,300$15,000$9,70035%$5,300$0$15,000$15,0000%
USAA   $4,900$6,000$1,10082%$4,900$0$6,000$6,0000%
Barclay$4,900$5,000$10098%$4,900$0$5,000$5,0000%
Citi$4,800$4,900$10098%$4,800$0$4,900$4,9000%
Furniture $4,400$6,300$1,90070%$4,400$0$6,300$6,3000%
SAMs  $3,500$7,500$4,00047%$3,500$0$7,500$7,5000%
USAA$3,000$3,000$0100%$3,000$0$3,000$3,0000%
credit union card$2,900$3,000$10097%$2,900$0$3,000$3,0000%
BOA  $2,900$2,900$0100%$2,900$0$2,900$2,9000%
Walmart$2,300$2,500$20092%$2,300$0$2,500$2,5000%
HSN$1,800$2,500$70072%$1,800$0$2,500$2,5000%
Wells Fargo$1,700$2,500$80068%$1,700$0$2,500$2,5000%
best buy$1,600$2,000$40080%$1,600$0$2,000$2,0000%
HHGreg$1,400$2,500$1,10056%$1,400$0$2,500$2,5000%
Chase$955$1,000$4596%$955$0$1,000$1,0000%
Chase$920$1,000$8092%$920$0$1,000$1,0000%
 $68,875$93,100$24,22574%$50,000$18,875$93,100$74,22520%
          

 

SCENARIO #1

         
CardCurrent BalanceCurrent LimitAvailable CLCurrent UTL %PayNew BalanceCurrent LimitAvailable CLNew UTL %
PayPal $8,500$10,000$1,50085%$7,500$1,000$10,000$9,00010%
Discover $7,200$8,500$1,30085%$6,200$1,000$8,500$7,50012%
USAA $5,900$7,000$1,10084%$4,900$1,000$7,000$6,00014%
lowes  $5,300$15,000$9,70035%$4,200$1,100$15,000$13,9007%
USAA   $4,900$6,000$1,10082%$4,900$0$6,000$6,0000%
Barclay$4,900$5,000$10098%$4,900$0$5,000$5,0000%
Citi$4,800$4,900$10098%$4,800$0$4,900$4,9000%
Furniture $4,400$6,300$1,90070%$0$4,400$6,300$1,90070%
SAMs  $3,500$7,500$4,00047%$0$3,500$7,500$4,00047%
USAA$3,000$3,000$0100%$2,625$375$3,000$2,62513%
credit union card$2,900$3,000$10097%$2,900$0$3,000$3,0000%
BOA  $2,900$2,900$0100%$2,900$0$2,900$2,9000%
Walmart$2,300$2,500$20092%$2,300$0$2,500$2,5000%
HSN$1,800$2,500$70072%$0$1,800$2,500$70072%
Wells Fargo$1,700$2,500$80068%$0$1,700$2,500$80068%
best buy$1,600$2,000$40080%$0$1,600$2,000$40080%
HHGreg$1,400$2,500$1,10056%$0$1,400$2,500$1,10056%
Chase$955$1,000$4596%$955$0$1,000$1,0000%
Chase$920$1,000$8092%$920$0$1,000$1,0000%
 $68,875$93,100$24,22574%$50,000$18,875$93,100$74,22520%
Message 21 of 38
sjt
Senior Contributor

Re: Paying Off Credit Cards


@Anonymous wrote:

@HYPASS33 wrote:

Ok so I have about 70,000 in CC debt and I am about to pay off 50,000 of this debt this week but would like some insight on the best way to do so that will increase credit score. Should I pay off highest cards and still have about 11 cards all under 3000 or pay down cards to get debt ratio say under 20% on all cards? I kinda want to pay off all high balances which will knock out about 12 cards but will still leave some other cards with high utilization. Hopefully I will pay off other 20,000 in next year to get out of debt. Give me your thoughts...


First of all congrats on paying off some cards! Thats awesome!

Second, what I would do is pay off as many cards as possible with the 50k and close them. Is this some type of loan or a second on your house or ? For the remaining 20k I would pay the rest off with an installment loan. 

I think the more cards you get rid of and close the better the chances are you wont get in this type of situation again and I feel like thats the most crucial. 


If you close the accounts, your utilization will not drop and score will not go up.

 

I would pay off the cards with the highest interest rate first.

 

 

American Express: Platinum Charge, Optima, Business Gold, Delta Business Reserve, Business Cash, Business Plus
Barclays: Arrival+ WEMC
Capital One: Savor WEMC, Venture X Visa Infinite
Chase: Freedom U Visa Signature, CSR Visa Infinite
Citibank: AAdvantage Platinum WEMC
Elan/US Bank: Fidelity Visa Signature
Credit Union: Cash Back Visa Signature
FICO 08: Score decrease between 26-41 points after auto payoff (11.01.21) FICO as of 5.23, EX: 812 / EQ: 825 / TU: 815
Message 22 of 38
HYPASS33
Frequent Contributor

Re: Paying Off Credit Cards

Which scenario is best for rising credit score and the way creditors look at it?

Message 23 of 38
Anonymous
Not applicable

Re: Paying Off Credit Cards


@HYPASS33 wrote:

Which scenario is best for rising credit score and the way creditors look at it?


I would assume Scenario #1 as you're paying off all of the cards but two....less debt, more CL available.

 

Anyone else?

Message 24 of 38
Pway
Valued Contributor

Re: Paying Off Credit Cards


@Anonymous wrote:

@HYPASS33 wrote:

Which scenario is best for rising credit score and the way creditors look at it?


I would assume Scenario #1 as you're paying off all of the cards but two....less debt, more CL available.

 

Anyone else?


I agree with Scenario # 1 would be best.

Thank you for the wealth of knowledge I have learned from these forums. I am logging off as of November 9, 2022. I wish everyone great success.
Message 25 of 38
Anonymous
Not applicable

Re: Paying Off Credit Cards


@HYPASS33 wrote:

Which scenario is best for rising credit score and the way creditors look at it?


 

 

Keep in mind that creditors will also be able to see historical information about how high your debt was at one time. It won't be reflected in your FICO score, but lenders do look at and consider patterns and charging high amts. Good to know.

Message 26 of 38
Anonymous
Not applicable

Re: Paying Off Credit Cards

Whichever scenario you choose, your balance owe after paying $50k will be thesame.  You're paying $50k regardless but distributing it different.

 

The only thing changing is:

 

Scenario 1 - you will only have 2 cards with balances (that's sweet IMO) 

Scenario 2 - you will have 11 cards with balances 

 

You could create a Scenario 3

Message 27 of 38
IWOL
Established Contributor

Re: Paying Off Credit Cards


@Anonymous wrote:

@HYPASS33 wrote:

Which scenario is best for rising credit score and the way creditors look at it?


 

 

Keep in mind that creditors will also be able to see historical information about how high your debt was at one time. It won't be reflected in your FICO score, but lenders do look at and consider patterns and charging high amts. Good to know.


Are you saying lenders can see your total debt load on a given month or date in the past?

Not sure what lenders see from their end but only some cards report high balance or past monthly balance and that data only seems to show on Transunion. Some cards dont report that data at all. I think it would be very hard for a lender to figure out what your excat debt load was/is on a particular day or month.


Message 28 of 38
Anonymous
Not applicable

Re: Paying Off Credit Cards


@IWOL wrote:

@Anonymous wrote:

@HYPASS33 wrote:

Which scenario is best for rising credit score and the way creditors look at it?


 

 

Keep in mind that creditors will also be able to see historical information about how high your debt was at one time. It won't be reflected in your FICO score, but lenders do look at and consider patterns and charging high amts. Good to know.


Are you saying lenders can see your total debt load on a given month or date in the past?

Not sure what lenders see from their end but only some cards report high balance or past monthly balance and that data only seems to show on Transunion. Some cards dont report that data at all. I think it would be very hard for a lender to figure out what your excat debt load was/is on a particular day or month.


Im curious to know that as well.  I was under the impression that they can only see "current" balances when a report is pulled.  That is why users ( a least me) wait until balances report $0 before applying for new cards...ummm.

Message 29 of 38
sjt
Senior Contributor

Re: Paying Off Credit Cards


@Anonymous wrote:

@IWOL wrote:

@Anonymous wrote:

@HYPASS33 wrote:

Which scenario is best for rising credit score and the way creditors look at it?


 

 

Keep in mind that creditors will also be able to see historical information about how high your debt was at one time. It won't be reflected in your FICO score, but lenders do look at and consider patterns and charging high amts. Good to know.


Are you saying lenders can see your total debt load on a given month or date in the past?

Not sure what lenders see from their end but only some cards report high balance or past monthly balance and that data only seems to show on Transunion. Some cards dont report that data at all. I think it would be very hard for a lender to figure out what your excat debt load was/is on a particular day or month.


Im curious to know that as well.  I was under the impression that they can only see "current" balances when a report is pulled.  That is why users ( a least me) wait until balances report $0 before applying for new cards...ummm.


From what I was told creditors can see a history of your balances. This allows them to see trends in your credit profile. For instance if you are making around the minimum payment each month and they see decrease in your outstanding balance vs no change in you balance, that can be the determination on whether they take AA on your account. The other thing is if you maintain a high balance then all of a sudden you pay the balance off they will still most likely monitor your account for a period of time for any changes to your balance.

 

 

American Express: Platinum Charge, Optima, Business Gold, Delta Business Reserve, Business Cash, Business Plus
Barclays: Arrival+ WEMC
Capital One: Savor WEMC, Venture X Visa Infinite
Chase: Freedom U Visa Signature, CSR Visa Infinite
Citibank: AAdvantage Platinum WEMC
Elan/US Bank: Fidelity Visa Signature
Credit Union: Cash Back Visa Signature
FICO 08: Score decrease between 26-41 points after auto payoff (11.01.21) FICO as of 5.23, EX: 812 / EQ: 825 / TU: 815
Message 30 of 38
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