12-10-2012 09:23 AM
Hello everyone! I have a question and looking for some input.
CC #1 balance of 8,300 Sams club Discover
CC# 2 balance 7,000 AARP Chase
CC#3 balance of 6500 Discover
All 3 close to maxed out. I have 2000.00 extra to apply. Do I apply it all to one or divide it up by 3 to lower all 3 balances?
12-10-2012 10:41 AM - edited 12-10-2012 11:00 AM
Utilization is calculated amongst all your credit cards so if you shared the $2000 on all the cards vs. Paying just one card your utilization will be the same.
- Sam - $8300 with $8500 limit
- AARP Chase - $7000 with $7500 limit
- Discover $6500 with $7000 limit
How utilization is calculated
$8300 + $7000 + $6500 = $ 21800 balance
$8500 + $7500 $7000 = $ 23000 Limit
Total Balance divided by Total Limit = Utilization
$21800 / $23000 = .974 ( x 100) = 94.7% Utilization
My suggestion would be is to pay this extra $2000 on the credit that has the highest Apr
12-10-2012 02:31 PM
This helps alot! Thanks for the information!
Now my next question is I have a CO on a CC from 2yrs ago and its still showing a balance of 1300.00. Since that is a CC is that balance factored in to my Utilization or just a baddie that I can try a PFD with?
12-10-2012 03:33 PM - edited 12-10-2012 03:41 PM
Yes unfortunately it's being factored as part of your utilization and also as a baddie, so I would use the $2000 to help with the PFD. I would offer the 40% of the debt and see what they say. but get it in writing before you pay.
Also most importantly is get your utilization down to 1-9%
myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.>> About myFICO