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Paying off credit card question

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Anonymous
Not applicable

Paying off credit card question

I'm looking to pay off my credit cards, but also looking for the best way to reduce my debt, so I can get a car loan.

 My credit score ranges from 700 - 740 depending on how much debt I carry.

 

Right now I'm maxed out on all of my cards.

 

Discover - $1200 / $1500

Amex - $1100 / $1200

Wells Fargo - $4000 / $4100

 

Right now I have aproximatly $3,300 to pay off my credit cards.  I have no other expenses other than my credit cards.

 

My question: Is it better to pay off fully the Discover and AmEx and leave the Wells Fargo at a high outstanding balance, and pay that off as I get paid, OR should I pay most of my Wells Fargo off, and keep the Discover and AmEx, and pay down time?

 

In the end, I would like to be completely debt free, but also would like to see the best way to reduce my debt. 

Message 1 of 4
3 REPLIES 3
marty56
Super Contributor

Re: Paying off credit card question

Welcome to the forum.  I would use the debt snowball approach and PIF Amex, Discover, and the WF card in that order.
1/25/2021: FICO 850 EQ 848 TU 847 EX
Message 2 of 4
Romeoo47
Regular Contributor

Re: Paying off credit card question

Well this question depends on what your ultimate goal is.

 

(1) If your goal is to save money:  I would pay off the card with the highest interest rate first and then work my down

 

(2) If your goal is to maximize your credit score:  This may or may not coincide with your goal of saving money, I would pay off Discover and Amex.  I would then take the rest and put it to Wells Fargo.  That way you will have 2 of your 3 cards reporting a zero balance.  However, WF will still have a UTIL rate of 73%.   That is still pretty high. 

 

(3) Another approach is to pay off the smallest balance first and work your work up. 

 

Both (1) and (3) are forms of the snowball approach that was recommended by marty

 

Anyway, good luck!

Message 3 of 4
Anonymous
Not applicable

Re: Paying off credit card question

Thanks for the help.. my ultimate goal is eventually to reduce my debt in order to be qualified for a car loan.
Message 4 of 4
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