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New Visitor
Posts: 1
Registered: ‎08-31-2009
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pay off or pay down over time?

Hey everyone. I'm new here and need a little advice. I have $4,100 out there currently in CC debt between 6 cards (total limits only $6,350) I am sitting here with a check for $5,300 and wondering what's best to do. I am a little afraid I might get some CLD if I all of a sudden pay all of them off? and this yr I really need the credit room. Prior to the last 6 mos I used to PIF every month and had Juniper drop my limit from 1,750 to 500 after running it up to 1,500 and then paying off! Coincidence maybe? Just wondering if it is better to pay off all at once or stick it in the checking account and pay over a couple months (APRs aside) Thanx for the help!
Senior Contributor
Posts: 4,923
Registered: ‎04-19-2009
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Re: pay off or pay down over time?


givinmeaheadache wrote:
Hey everyone. I'm new here and need a little advice. I have $4,100 out there currently in CC debt between 6 cards (total limits only $6,350) I am sitting here with a check for $5,300 and wondering what's best to do. I am a little afraid I might get some CLD if I all of a sudden pay all of them off? and this yr I really need the credit room. Prior to the last 6 mos I used to PIF every month and had Juniper drop my limit from 1,750 to 500 after running it up to 1,500 and then paying off! Coincidence maybe? Just wondering if it is better to pay off all at once or stick it in the checking account and pay over a couple months (APRs aside) Thanx for the help!

 

Welcome to the forums!

 

Not quite a coincidence, but coincidental. Juniper just didn't like you using your CL - the paying part probably was not a factor. If you want to pay everything off go ahead. If you want to take a slightly more gradual approach do this: 1) make payments such that your balance on every card will be less that 30% of its CL -and- pay off some of the lower CL cards in full. (You should get a nice FICO bounce from this.) 2) Followiing that you want to get your total UTIL to > 0% and <= 9% (the lower the better) with less that half of your revolving CL's reporting a balance and half or less of all your TL's reporting a balance. You need to do 1) very soon and 2) at your own pace. Good luck!

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Posts: 2,682
Registered: ‎07-29-2009
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Re: pay off or pay down over time?

Personally? I'd pay them all off.

 

You can't dismiss the APRs you're paying on cc's these days. Paying them off now will save you hundreds of dollars in interest compared to if you spread it out over a few months.

 

Paying them off will also increase your FICO scores.

 

Without more details...(why will you be needing more credit? what are your FICO scores? any negatives on your reports?...etc), that's what I'd do...but, then...I hate paying interest.

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