What's my best course of action? (Pay off debt vs preserving credit score).

[Nyru]

Hi everyone,

So, I'm in a bit of a predicament and just need some advice. I have 3 credit cards with balances on them. Freedom with $1900 bal on $2K limit  (0% APR til Oct), $800 bal on discover it w/ $1K limit (3% APR til July), and $1100 bal on $5K chase Hyatt (15% APR). I have a savings Acct. w/ $1200 and I net $2400 a month. (I have a total of $18000 availabe credit through my other cards, but they all have 0 balances).

Disc reports my acct to the bereau on the 6th, Freedom on the 11th, and Hyatt on the 12th. My question is this: I get my first check of the month tomorrow. Should I just pay off the Hyatt card completely? Or should I split between disc and freedom so that my utilization ratio on those cards is less than 30%? Or should I pay off the Hyatt with the high APR so I pay less interest. I guess I'm just wondering if paying a couple dollars in interest is worth have a better credit score in the long run?  TU- 680, EQ- 640, EX- 673

Last question: Should I leave my savings acct. alone? Because I was thinking of using it to pay off the debt quicker.

Thank you all. I appreciate it.

[enharu]

I would recommend u use ur savings to pay off cards that are charging you interests. Those fees are ridiculous. Just focus on minimizing interest fees and reduce your debt. As you go through the process, your credit scores will go up on its own.

[Commandolam]

Pay off the cards with the highest interest first, regardless of amount.  Don't worry about your credit score right now.  The point of having a high score isn't so you can show it off, but to save you money.  You can save money right now by by paying off your higher interest cards.

Also, if your score drops due to utilization, the drop will be reversed when you get your utilization down.  High utilization isn't like inquiries where they stay on your report for a while.  It's a snapshot kind of thing.

[Nyru]

Makes sense. Thank you!

[FocusedAndDetermined]

Take care of the highest interest first, you never know when those couple extra dollars might come in handy.  It shouldn't take you long to tackle the others, and then your overall utilization will be very low.

[boomhower]

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@Commandolam wrote:

Pay off the cards with the highest interest first, regardless of amount.  Don't worry about your credit score right now.  The point of having a high score isn't so you can show it off, but to save you money.  You can save money right now by by paying off your higher interest cards.

Also, if your score drops due to utilization, the drop will be reversed when you get your utilization down.  High utilization isn't like inquiries where they stay on your report for a while.  It's a snapshot kind of thing.

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Completely agree.