Paying off a balance with 0% APR

[aross88]

Need some advice.  I have a Best Buy credit card and made a large purchase using their 18 month 0% program.  I have been making payments that correspond to the 18 month timeframe so that it will be fully paid in 18 months.  The purchase was just under 50% of the cards limit.  I'm thinking about applying for a mortgage.  I don't have any other credit card debt.  Should I just go ahead and pay this off or is OK to keep paying it at the 0% rate for the next year or so?

[user5387]

Reducing the utilization may help your scores, and only you can say how important this is, relative to qualifying for a mortgage and getting the best rates.

A mortgage involves a lot of money over a long time frame, and it seems to me that there's quite a bit of leverage in optimizing scores beforehand.

What is your overall utilization, and how many cards do you have?

[aross88]

Including store cards, 9.  Overall utilization is 2%.

[Bluegoldkeys]

Your utilization is wonderful. I say drop it down to 1% and keep your payments going. Just make sure you don't have any lates.

[armbenderc]

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@aross88 wrote:

Need some advice.  I have a Best Buy credit card and made a large purchase using their 18 month 0% program.  I have been making payments that correspond to the 18 month timeframe so that it will be fully paid in 18 months.  The purchase was just under 50% of the cards limit.  I'm thinking about applying for a mortgage.  I don't have any other credit card debt.  Should I just go ahead and pay this off or is OK to keep paying it at the 0% rate for the next year or so?

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I would stay where you at. As long as your util is 1-3% you are fine. Keep it on one card only. If you PIF, your score will drop because of the 0% UTIL.

[user5387]

What I'd suggest is being sensitive to score thresholds for mortgages.

For example, if a person is at 695, and needs to get to 700, and they have one card with 50% utilization, then it may be time to pay that card down to 5%.

If there's no issue of being borderline, then I wouldn't worry so much about it.

FICO scoring considers both overall utilization and utilization of individual cards.

[DrZoidberg]

I'd pay a little bit down, there is no reason to pay it off since you already have a good utilization.