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03-15-2009 06:30 AM
Ive been reading the forums for a while and find the information here very informative. I wish I would have known about it sooner
... I am trying to increase my score. Im trying to figure out how I can best allocate my tax refund so that I can get the most increase on my FICO. I have one Cap. 1 card at $1560 @ %14, another Citipass at $2800 @ %30 and another Chase at $4500 %30 (those rates are really hurting, and Chase told me that the particular card WONT report a credit limit to the CRA - is that illegal ?) ....
Obviously the smarter choice would be the Chase, since its eating me up in interest (can anybody also tell me the legal amounts of interest that can be charged ?), but I just wanted to get some expert opinions here ....
Should I pay off Cap. 1 and apply the rest to Chase or cut Chase in half ?
Thanxs so much,
03-15-2009 09:39 AM
03-15-2009 10:17 AM
If you're not planning to app for a loan or CC anytime soon, I think your focus should be on saving money and preserving capital, not on raising your credit score. Therefore, I suggest allocating your tax refund as follows:
Every dollar used to pay against the 30% APR cards is effectively earning you 30%. In today's economy, you'd be hard pressed to do better than that.
03-17-2009 07:53 AM
How big is the tax refund? Is it enough to pay off one of the 30% interest rate cards? If so, do that and then focus on paying off the other while paying the minimum on the CapOne card.
I would agree with others that it makes the most sense to save yourself money here, the fico score gain for paying off the smallest card in full is only a few points. I'd rather save $$$.
There are some cards that do not report a limit to bureaus (mostly AMEX I think). I don't have one, so I can't speak from experience, but I think it sometimes uses your highest reported balance for the limit. Someone else can probably verify or correct me there.