Pay off debt or Raise Secured Limit

[samahok]

Hey myFico forum family!  I recently got a raise with my job, and am now making about an extra $150 a week.  I currently have a CC debt of around $1900 (recent wedding expenses)  but that card is at 0% interest for another 10 months.  I also have a Cap 1 secured card with a $400 limit.  SInce I was living pretty comfortably before my raise, I would like to use this extra $150/wk on my debt and/or adding to my balance before I get careless and start spending it.  My question for you forum members is, should I put the whole $150 extra to try to payoff my CC quicker?  Or should I pay my normal $100/wk to my CC and some to add $150 to my secured card?  I am treating my secured card almost like a savings account at this point while also trying to raise my limit for future creditors.  Once my secured card is almost a year old I plan to close it and use whatever money I have in it as a down payment for a desperately needed new truck.

Which option would make more sense?  Thanks for any input or advice!!

[bluescale]

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@samahok wrote:

Hey myFico forum family!  I recently got a raise with my job, and am now making about an extra $150 a week.  I currently have a CC debt of around $1900 (recent wedding expenses)  but that card is at 0% interest for another 10 months.  I also have a Cap 1 secured card with a $400 limit.  SInce I was living pretty comfortably before my raise, I would like to use this extra $150/wk on my debt and/or adding to my balance before I get careless and start spending it.  My question for you forum members is, should I put the whole $150 extra to try to payoff my CC quicker?  Or should I pay my normal $100/wk to my CC and some to add $150 to my secured card?  I am treating my secured card almost like a savings account at this point while also trying to raise my limit for future creditors.  Once my secured card is almost a year old I plan to close it and use whatever money I have in it as a down payment for a desperately needed new truck.

Which option would make more sense?  Thanks for any input or advice!!

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Do you have a regular savings account?  If not, rather than putting anything toward the scured credit card, I'd start socking away the extra money in a higher interest account (like a money market at Ally).  If you already have a savings account, I'd pay off the debt before doing anything else with the secured card.

Personally, I look at any non-property debt as a chain.  Even a 0% interest debt can quickly become a problem if something goes wrong.

[guiness56]

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@samahok wrote:

Hey myFico forum family!  I recently got a raise with my job, and am now making about an extra $150 a week.  I currently have a CC debt of around $1900 (recent wedding expenses)  but that card is at 0% interest for another 10 months.  I also have a Cap 1 secured card with a $400 limit.  SInce I was living pretty comfortably before my raise, I would like to use this extra $150/wk on my debt and/or adding to my balance before I get careless and start spending it.  My question for you forum members is, should I put the whole $150 extra to try to payoff my CC quicker?  Or should I pay my normal $100/wk to my CC and some to add $150 to my secured card?  I am treating my secured card almost like a savings account at this point while also trying to raise my limit for future creditors.  Once my secured card is almost a year old I plan to close it and use whatever money I have in it as a down payment for a desperately needed new truck.

Which option would make more sense?  Thanks for any input or advice!!

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What is the CL on the card?  If it is maxed out or has a high balance I would get it below the maxed out area and get it paid down. 

[samahok]

The limit for that card is 3500, and I have 4800 in total available credit. My savings account only gets less than 1% interest...which is why I didn't see any benefit putting it in there for the time being. I had figured if I can get my limit on the card up to 2-3k and close and get my money back that it would look good if I try to apply for any new cards in the next 6-8 months.

I will go to my local credit union and see if there are any other savings accounts with some higher returns. Thanks again!

[Dubious]

I also agree that you should pay off the debt first. Because you already have a card with a $3500 limit, I don't see raising the limit on your secured card to be a priority right now. 

[bluescale]

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@samahok wrote:
The limit for that card is 3500, and I have 4800 in total available credit. My savings account only gets less than 1% interest...which is why I didn't see any benefit putting it in there for the time being. I had figured if I can get my limit on the card up to 2-3k and close and get my money back that it would look good if I try to apply for any new cards in the next 6-8 months.

I will go to my local credit union and see if there are any other savings accounts with some higher returns. Thanks again!

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I've never had a secured credit card, so I don't know how they work.  Will you have to pay interest if you have to use it for an emergency?  If so, then I'll reitterate my suggestion of stashing the extra money away in a saving account.  Having $1000 available on a card that will charge you interest is very different from having $1000 avalable interest free.  If you have to spend the $1000 from a savings account, you don't get saddled with a monthly payment.

I'd recommend putting $100 extra toward debt, and $50 in savings.  I say this as someone who used credit to bail myself out of a tight spot, and then spent 4 years paying for it.

[samahok]

All great points guys!! Looks like my secured will stay at 400 until I close it before its af is about to hit. That was my first card for building credit, since I got it my score has gone up almost 70 pts so it's really done its job. I'm gonna go do some research on others ways to save and maybe even invest once my cc is paid off.

Thanks everyone for your input!!