Want to pay down CC.

[Anonymous]

My overall util. is 43% but I am much higher on certain cards.  I have some money to pay down on my credit cards and my interest rates vary on the cards.  The cards with the highest utility happen to have the lowest apr's.  I need to lease two new cars this year and I am very concerned about my FICO.  I am currently around 650.  I am willingly to pay down on the cards with highest utility but only if you think that it will make a difference on my overall credit score.  My overall utility will not change dramatically when I pay down some of the debt.  High utilization is my only major baddie.

[haulingthescoreup]

Can you post a list of your cards with current balance, credit limit, and APR on the ones with balances? Plus a brief summary of any baddies that you might have besides high util.

We love to help other members spend their money!

[Anonymous]

joint accounts:

Citi         $17K bal/$25K CL - IR 2.9%

BofA       $14K bal/$17K CL - 0% IR - coming due in aug to 12.99%

Chase    $9K bal/12K CL - 3.9% IR

WAMU    $1K bal/3K CL - 0% - rate change not due for a while

my accounts:

BofA      $17K bal/19K CL - 4.99% IR

FIA         $10K bal/19K CL - 15.99% IR

WAMU   $7K bal/9K CL - 0% IR - will be paid off (different money) before rate change

GEMB    $399 bal/3K CL - 0% IR - will be paid off (different money) before rate change

I have 15K to play with.  I really want to pay off FIA and some of the BofA that is coming due in Aug.  However, we need to lease two new cars and my husband makes all of the income.   Both of our FICO scores range from 650 - 680. 

Our overall util. is 43%.  What do you think we should pay off?  My husband has 1 30 day late on  credit card from 4/06.  I have the same 30 day late plus a 30 day late on car lease from 3/06.  I was a cosigner for my brother in law and I am trying to write a GW letter to VW credit.

Message Edited by jamaraz1 on 04-11-2008 07:11 AM

Message Edited by jamaraz1 on 04-11-2008 07:15 AM

[Anonymous]

I agree with "I have 15K to play with.  I really want to pay off FIA and some of the BofA that is coming due in Aug."

2 new car leases? Do you own your own company?

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jamaraz1 wrote:

joint accounts:

Citi         $17K bal/$25K CL - IR 2.9%

BofA       $14K bal/$17K CL - 0% IR - coming due in aug to 12.99%

Chase    $9K bal/12K CL - 3.9% IR

WAMU    $1K bal/3K CL - 0% - rate change not due for a while

my accounts:

BofA      $17K bal/19K CL - 4.99% IR

FIA         $10K bal/19K CL - 15.99% IR

WAMU   $7K bal/9K CL - 0% IR - will be paid off (different money) before rate change

GEMB    $399 bal/3K CL - 0% IR - will be paid off (different money) before rate change

I have 15K to play with.  I really want to pay off FIA and some of the BofA that is coming due in Aug.  However, we need to lease two new cars and my husband makes all of the income.   Both of our FICO scores range from 650 - 680. 

Our overall util. is 43%.  What do you think we should pay off?  My husband has 1 30 day late on  credit card from 4/06.  I have the same 30 day late plus a 30 day late on car lease from 3/06.  I was a cosigner for my brother in law and I am trying to write a GW letter to VW credit.

Message Edited by jamaraz1 on 04-11-2008 07:11 AM

Message Edited by jamaraz1 on 04-11-2008 07:15 AM

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[Anonymous]

No, I don't own my own business.  Our regular car leases just happened to come due at the same time.  I should have planned better!  So you think don't think lowering the util on some of higher balance cards would make a difference to my credit score?  I want to do what is economical, but I also want to take advantage of the best lease rates. 

Message Edited by jamaraz1 on 04-11-2008 11:43 AM

[Anonymous]

The issue I have with paying FIA/BOA in full is they have begun to CLD accounts after PIF.

Message Edited by FaircreditguyFL on 04-11-2008 04:08 PM

[Anonymous]

What exactly does that mean?  Should I pay down the line to $500?

Does individual cards utilization count less than overall utilization?  I am almost maxed out on several cards but my overall utilization is 43%.  I want to pay off/down the highest IR card but I am concerned that my utility on a few cards is hurting my fico score.   

[haulingthescoreup]

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@Anonymous wrote:

What exactly does that mean? Should I pay down the line to $500?

Does individual cards utilization count less than overall utilization? I am almost maxed out on several cards but my overall utilization is 43%. I want to pay off/down the highest IR card but I am concerned that my utility on a few cards is hurting my fico score.

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My understanding is that individual util and overall util are weighed equally. Even if that's not so, maxed-out cards are known score-killers.

I would at a minimum make sure that every card is under (not at) 85%, and preferably lower. In these twitchy credit times, you risk seeing your CCC's start dropping your balances to over $50 of your current balances, month after month, to force you to drastically reduce your debt load.

And although it's a struggle, the advisable long-term goal is to have overall util under 10%, maybe only one card with a serious balance IF it's at 0% and you're paying way more than minimum payments, and most cards reporting 0 balances with only 1 or 2 reporting a modest balance.

[Anonymous]

Thanks.  That makes sense.   I guess I'll pay everything down to 84% and then concentrate on the higher IR cards.  I should be able to pay down another 30K by the end of the year.  I am just very concerned about having to lease 2 new cards before I can pay down more of my balances.  I think the most I can get my scores up to is 680 and I really need the lowest apr possible.

Message Edited by jamaraz1 on 04-11-2008 05:56 PM

[haulingthescoreup]

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@Anonymous wrote:

Thanks. That makes sense. I guess I'll pay everything down to 84% and then concentrate on the higher IR cards. I should be able to pay down another 30K by the end of the year. I am just very concerned about having to lease 2 new cards before I can pay down more of my balances. I think the most I can get my scores up to is 680 and I really need the lowest apr possible.

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One suggestion, VERY cautiously offered, is that after you get everything under maxed, you can try to take out an installment loan and pay off your balances (all but one, and that one under 10%, etc.) Usually you can get a better APR on an installment loan, and this will help your util and therefore your scores by shifting util from revolving to installment, where it has much less impact on scores.

I'm always hesitant to mention this, because those cards got run up somehow, and if the behavior that led to having maxed-out cards has not drastically changed, you will soon have a big installment loan and a bunch of maxed-out cards again. So I usually say to take all but one of the paid-off cards, stick them in a safe-deposit box at your bank, and keep one card to use only for everyday expenses like gas and groceries that you would otherwise pay cash or write a check for. When trying to wipe out CC debt with an installment loan, it is absolutely crucial that you STOP SPENDING! No matter what situation pops up during the repayment of the loan --need new soccer cleats for the kids, the dog knocked over and broke the living room lamps, whatever --you can't use credit for anything other than the everyday expenses mentioned above.

And I hope that everyone understands that this is just general commentary and advice --I'm not speaking directly to OP's situation.