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I'm 20 years old and work part time. I don't really have a lot of debt. I have 5 credit cards.
1. Citi - $1,269
2. Capital One - $463
3. HSBC - $239
4. FPB - $132
5. Nordstrom - $101
I don't want to spend ALL the cash I have on my credit cards, but I want to ask what a better scenario would be and why?
Option 1:
Pay off Cards #3, #4 and #5 and then continue to make payments and save money until I can pay off the other cards.
OR
Option 2:
Continue saving cash until I have enough money to pay off ALL my accounts at ONCE.
Do any of these scenarios make a difference?
Thanks for your help!
#1 Sounds best to be, as you would have 2 out of 5 charged. Then pull a snowball effect on the last two.
@grigorexxxcore wrote:I'm 20 years old and work part time. I don't really have a lot of debt. I have 5 credit cards.
1. Citi - $1,269
2. Capital One - $463
3. HSBC - $239
4. FPB - $132
5. Nordstrom - $101
I don't want to spend ALL the cash I have on my credit cards, but I want to ask what a better scenario would be and why?
Option 1:
Pay off Cards #3, #4 and #5 and then continue to make payments and save money until I can pay off the other cards.
OR
Option 2:
Continue saving cash until I have enough money to pay off ALL my accounts at ONCE.
Do any of these scenarios make a difference?
Thanks for your help!
Option 2 will cost a lot in interest, not recommended.
Genereally, You should pay off the highest interest rates first. And for new purchases, you should use the cards that are not carrying a balance and PIF. That way you make use of the grace period, interest free.
I totally forgot about interest. I think I should do option 1 then. What exactly is the 'snow ball effect'? All my accounts, except Nordstrom are very close in APR. They are an average of 10% interest.
I say Option 1, so you wont be carying balances and paying interest on all 5 cards.. Also paying those 3 down now will probably help woth your utilization, depending on yout limits.
What are your limits on each of those cards?
Citi - $1,269 / $1,300
Nordstrom - $101 / $500
Orchard Bank - $239 / $320
First P.B. - $132 / $250
Capital One - $462 / $750
You say that you don't have a lot of debt. Good! I wouldn't get accustomed to it. Debt is BAD! Put as much money as you can on the credit card debt to avoid paying interest. Otherwise, you'll get used to these balances, and in the course of the years, they might just grow.
Keep in cash what you need for living expenses and pay off as much as you can!
Also, I personally would kick that F.P. card out! Close it and save yourself some dollars. You've got enough other cards.
Should I really cancel my F.P.B. card? I've had it for a while and ever since Citi closed my account (Promised to re-open after I pay off my debt) and would like to keep it? I don't mind paying the annual fee since I won't really use that card that often?
You do mean First Premiere? How much does it cost per year in total?
I agree cancel the first premier.. no since in paying a af on a card you wont use and they are stingy and arent going to grow anytime soon. and 250 of utilization is not worth paying them any amount in fees.