Re: Want to be debt free with min. Cards
01-26-2013 09:58 PM
my advice is based on some of the things you posted about that are specific to you and your finace.
namely, number 1, that you have both 'been there, done that' re maxing out cards, having to pay with tax returns and even taking out consolidation loans in the past.... over and over.
number 2, you already have a mortgage (i'm assuming you won't be applying for another mortgage any time in the next few years.
number 3, you are willing now to aggressively get a handle on your cc's and debt.
and number 4, you have so many cards between the 2 of you that you have been late making payments (e.g. 5 days late)
if i were in the position you are in
i would look at closing some cards - starting with any low limit cards with AF's that aren't really serving you well (except to be a temptation to spend/charge more. i would weigh how long the card was open (length of credit history with that card vs your overall length of cc history). i would pay off those cards in full and close them after you are sure there is no balance (and hopefully before any AF comes due).
i would then look at any cards that have small balances(say, less than $100) but you want to keep the card for either reqards or other benefits and pay those off in full
Nest (and you haven't indicated how much $ you have available at this time to dedicate to paying down balances), i would systematically start paying dowm the higher APR balances (i personally hate paying interest!) and hopefully you are able to pay more than the minimum due.
i would SD all the cards that you intend to keep and NOT charge anything until all balances reflect <10% utility (or, preferably $0)
as your balances decrease and you've closed really low CL cards with AFs, i would then take stock of the better (good rewards, no AF, low APR) cards you have left and pro-actively decide which cards to keep and which of the remaing ones to close.
if i had to start keeping a spreadsheet just to be sure i didn't miss a cc payment due to the number of cards i had, in my mind that would tell me i had too many cards
look at your rewards categories and perhaps each of you could choose 1 really good rwqard to keep open individually, and 1 good rewards card to keep open jointly. or choose by MC, visa, discover, amex to keep one of each open individually and one of each to keep open jointly.
imo, once you have closed cards that aren't doing anyting for you (low CL, AF, high APR) and after you have come very close to paying down all of your other cards, you might then start looking at getting CLI increases on your remaining cards.
In any case, kudos and best of luck to you both for recognizing and taking an aggressive approach to getting your cc's and debt under control!!!
myFICOs as of 9/28/12: TU=777.... EQ=793