Conflicting advice (but I'm sure context is everyting)

[Anonymous]

I could tell a long story about how I thought I'd be in a position to refi this past fall/winter and am not, now I'd like to make sure that IF other things fall into place, my credit score is as good as possible when the time comes. 

My timeline is that I think it's possible that a few things may fall into place to where I could maybe think about a refi around summer, in which case I won't have paid down a whole lot, and how the pieces are arranged may be more important. But I think it's more likely that it won't be possible then and it would be a 'maybe at some future time if interest rates stay low.' Which is why I tend to think maybe my original plan of avoiding interest is better than chasing a score. But now my curiosity is piqued and I want to know about these two things I've read:

--Have only one CC report a balance and keep it under 10% of its credit line

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Utilization-down-to-39-from-65-but/td-p/3...

--It's better to have three cards owing $333 than one card owing $1000

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/credit-card-utilization-distribution-impo...

I assume in the case of the latter that it's because the $1000 would be maxing out a card. I've been playing the 0% balance transfer game for several years. I had almost gotten rid of all CC debt when we did the kitchen. And with that we went a little (ahem) overboard. (And can't refi as intended, so..) So I'm back at it. I'm trying to figure out if it's better to knock out cards one by one to $0 balances or to spread things around to keep utilization as low as possible across the board, knowing that it'll be no where NEAR the perfect world suggested in the first linked thread. I've always just worried about minimizing interest, but I realize now that if it costs me a little interest now to have a better score which would mean a lower mortgage interest rate...that's a big deal. We're in the 'good' range, but that darn mortgage FICO is always lower. 

I made some quick calculations and I've got 14 CC accounts with an overall utilization at 54%. I've got 5 0% interest cards right now. A couple of those in the 90%'s of CL and the a couple are in the 60-75%'s. Most are small balances and will paid off before the end of the year. The largest is 0% until next July and I'm hoping to refi to pay it and a few other things off before it incurs interest.  I use 5 CC's that I pay the statement each month and don't incur interest.  I have 3 $0 balance cards and only 1 that's charging interest. 

Paying down debt and transferring balances

I have one card with my CU with a high CL relative to the rest, a liveable interest rate, and no BT fees, so when I'm near the end of a 0% offer I tend to dump it onto there because the interest rate isn't bad, and then work to pay it down ASAP. That's why it's at 73% of the CL right now. We should have some extra $ to throw at something this next week and my plan was to throw it towards that. I try to keep as much as possible at 0% and was also going to BT from a Discover card on a 0% offer to pay down a chunk of this card, which would put the Discover up in the maxed out range rather than the 60some% that it's at now. Q: Should paying that card down be my focus since it's charging interest? Or even if it costs me some in interest now, should I work on paying it down AND paying down as many as possible to lower utilizations and NOT transfer some to the Discover and raise that back up to it's max? 

Current useage

I've got a 5 cards that we use on a regular basis and pay the statement each month, but due to the revolving nature, they're generally between 20%-40% when reporting. I've got 3 cards with $0 balances. Q: If I don't intend to pay the entire balance owed or pay each down to 10% each month, would I be better to spread that around to those empty cards too? Or better to keep them empty?  To that end, two of the empty cards are Citi cards that I've gotten 0% offers on on a regular basis in the past and I'd thought I'd utilize them in that manner if they roll around again...but now I'm rethinking that. Thoughts?

[lg8302ch]

Welcome to the forum

Maybe it would help if you could list the cards with limits, balance and APR so we could get a better picture?

In general I would recommend to look at what makes financially sense rather than optimizing scores if you do not need to apply for anything. This is just general but if we could see the full picture we might be able to come up with a better plan.

[NRB525]

OP your situation is not unlike mine: Once one has large balances on multiple cards, in my opinion the main focus becomes finding ways to save interest expense. The only FICO score factor I have any interest in is making sure I never miss a payment.

If a 0% APR offer shows up, and I've got a balance paying interest, I will BT to take advantage of it, even if it means that card goes to 90%+ Utilization, which I have done several times with Discover, and over 70%-80% with BofA, and US Bank in the last year. Having the amounts on 0% or low interest APR lets you pay down the balances that slight much faster than if also paying interest. Discover has responded with more offers for spend bonuses, BofA gave me a $3k CLI on a card that previously had seen CLD in years past. So as long as payments are heavy, the high utilization is not an issue with particular cards. It also builds up your borrowing history to make it easier to get those higher utilization numbers without triggering any AA.

I did move some balances on to my Capital One card, despite the interest cost, because I'm playing games to try to get a CLI on that one. I took a draw on a new Credit Union PLOC for a similar reason, to show activity on a Term Loan and expand my credit history in my file and with the CU.

I keep several cards in PIF mode only, so true daily spend goes on those cards. The way the new payment requirements work with the CCC, however, you can legitimately put daily spend on a BT low APR card, pay the amount you want to pay that BT balance down, and pay the "new charges" amount as extra, and see almost no interest expense in that case: They have to apply the extras to the highest APR (current spend) amounts.

That leads to the observation: If one has high utilization, the "one card reporting 1%-10%" is not even in the relevant discussion. Avoid interest cost wherever possible and pay down balances. FICO will take care of itself over the long term.

When planning for a refi, if you have existing balances, getting the balances down is the main thing, and it does not matter which card those balances are on, not really, not to any measurable effect. Your main objective is reduce interest cost.

For the Citi cards specifically, I would use those for very small charges, PIF each month, just to keep them active, keep them alive. I sent a SM to Citi in February asking whether there were any BT offers for me. Their first reply was, sorry, there are no current offers. Then in March, they sent a BT offer. So it may pay to poke the bear about available BT offers just to wake up the bear.

[Anonymous]

Thanks to you both. I'm not comfortable with posting anything more specific than I did at this point. And I think NRB525 summed it up. After I posted I went on to the Discover site and asked for a CLI and got another $1000 so I think I'll be transferring about $2300 from the one card charging interest to there. The Discover card is in my name alone and DH keeps getting offers to apply for Discover. I think we'll do that too and see if we can get most of the big card with interest moved there. 

That will make me happy for a while. I've got the two big 0% HD cards hanging out there that will be off 0% June 2016 or so. Those make me nervous. 

Hearing that mortgage interest rates are going to rise, I felt a little panicked that I needed to do something NOW. But I think I'll just plod along.