Paying down CCs best course of action?

[Anonymous]

I have two cards both with similar balances, interest rates, and, unfortunately, high util. Would I be better to evenly pay them both down or pay a little on one and more on the other? Basically, is having two accounts at 50% util better than having one at 75% and one at 25%? Thanks!

[Anonymous]

I would pay both down evenly to lower UTL in your case.

[Tuscani]

Yep.. pay down both.

[Anonymous]

Keeping CC balances under 10% is guaranteed to exert an upwards pressure on FICO scores. It also helps insure against interest rate increases, and makes CC companies more apt to grant CLIs.

[Anonymous]

Thanks for the advice!

[VLGaffEsq]

I agree, and you should especially listen to Tuscannui because he knows his stuff!  Get both those balances down to below the 9% utilization to get the maximum pop in your FICO scores.

[VLGaffEsq]

sorry for the misspelling...Tuscani!

[FICOnater2007]

I guess it depends on whether your goal is to get out of debt or tweak your credit.  There are others on this forum (like the moderators) who can best advise on the credit side. 

Regarding getting out of debt, Dave Ramsey and others say to pay minimums on all but your smallest debt; then throw all your extra cash into reducing that one to ZERO.  Afterwards, you'd want to take what you were paying on the first debt and add that to the payment of your next debt to eliminate it.  Then with both of those gone, add all of this $$$ towards the next smallest debt, and etc., etc. until you eliminate them all.  Proponents of this claim you'll be debt-free in 10 years (counting your car and house payments too).

Good luck,

FICOnater2007

[Anonymous]

Instead of always worring about your FICO score and paying extra to your credit cards.  You should take that extra money and have it work for you.  Do you have an IRA, Roth, Univerisal Health Policy?  If you said yes, you should be putting that extra money into these accounts and have it work for you, instead of putting an extra 50 or 100 dollars on a credit card, which does very little to your balance.  But if you did that every month for 20 years, just about the aveage time it takes to pay off a 10k credit card, you will have a retirement savings in the 100's of thousands!!!

[haulingthescoreup]

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@Anonymous wrote:

Instead of always worring about your FICO score and paying extra to your credit cards. You should take that extra money and have it work for you. Do you have an IRA, Roth, Univerisal Health Policy? If you said yes, you should be putting that extra money into these accounts and have it work for you, instead of putting an extra 50 or 100 dollars on a credit card, which does very little to your balance. But if you did that every month for 20 years, just about the aveage time it takes to pay off a 10k credit card, you will have a retirement savings in the 100's of thousands!!!

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I'm all in favor of Roth's--I've got one myself--but IMO it's incredibly important to get a handle on credit usage first. Stop shopping, get the utilization on the cards down, and then start investing. It's not just worrying about scores--high util might result in not getting lower interest rates or higher credit limits or getting them to drop an annual fee. My money is working for me by putting me in a stronger position when I want to borrow. I don't have to pay interest or monthly minimums, and that money goes to the Roth.

Sure, I wish I'd started saving earlier, but at least we could get a 5.75% mortgage and a 6% car loan. Try doing that with high credit usage and not particularly caring about scores. I don't plan to obsess about scores forever--I figure I've got about a month's more curiosity in me--but I know that what I'm doing will pay off later.

Sorry, OP--you asked how to start paying them down, one at a time or simultaneously. You'll get a zillion answers, but probably the answer is "yes." Maybe the 75% one first, if you'd feel better. Your CCC will probably feel better! But it will feel sweet once you don't have to pay finance charges any more. good luck