Hello,
I am pretty new here and wasn't sure where to post my question but I think I am in the right place. Anyway, here is my question. In mid-August I will be able to pay off half of my revolving debt in one shot (about $2500-3000 to put towards debt reduction). However, I am not sure which one of my accounts I should take care of first. I currently have 3 open accounts and 1 closed one (with a balance).
The open accounts are: 1) $2500 limit Platinum Visa [16.99%] and 2) a $1000 limit Visa [12.99%] through another credit union, both of which are maxed out. I also have a Auto Edge GE card with $475 available and a zero balance. Now here is the kicker. I also have a Citi account that I closed back in 2009, that has a $2800 balance [originally $4700 limit prior to closing] left on it at 24.99% APR. I have NEVER stopped paying the monthly or was ever late even after I closed the account (due to my non-knowledge about credit at the time + the insane interest they bumped it up to).
So what should I pay first? Part of my open accounts or should I knock out the closed one first? I've heard that by paying the closed account first that I would actually REDUCE my revolving limit somehow and that would lower my score. But this is the highest interest account. I just have not seen too many posts on this that don't involve charge-offs or non-payments to closed accounts, which is not my situation.
Thank you for your help and advise!
P.S. My goal is to pat the other "half" of what I owe in January when I do my taxes.
