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@Lel wrote:
@Anonymous wrote:
I've got about $39k in revolving debt. With the sale of my house, I can pay off that entire amount from our equity. Here's my question: Is it better to pay that off all at one time, or should I spread the payoff out over six months? It would seem to me that paying it off immediately would be the best bet and then continue to have my utilization below 1% (currently, I'm maxed).When I play with the FICO simulator, I seem to get a better projected score by paying $6,600 each month for six months.
My question to you would be: do you want the points or do you want the money? By money I mean the savings in interest payments that would come along with paying off your revolving debt all at once. Even if you had a relatively low interest rate of 10%, you'd still end up paying several hundreds of dollars in interest if you choose to pay off your revolving debt over 6 months.
One could argue that if you're a savvy investor, you might be able to invest the money and get returns that exceed your interest payments, but that's always a risky assumption.