topic Re: What to Payy Down with $2500 in Credit Cards

What to Payy Down with $2500

kristin93 — Thu, 15 Dec 2016 19:02:00 GMT

Hi everyone,

I've got a situation that I need guidance on.

I have $2500.00 readily available to pay off a very small amount of my credit debt. I just need to know what strategy will work more in my favor, as I am searching for a good balance transfer card that I can PC to (I really do not want to open a whole new credit card) ASAP.

A bit about my profile:

Credit Score: 690ish

Overall CC Utilization: 29%

AAoA: 2 years, 9 months

Credit Inquiries: ~4 on each bureau

No baddies or derogs

Current Balances (every single card):

Amazon Prime Store Card: 0.00/5000

American Express Everyday: 8696.44/13500

American Express Premier Gold Rewards: 2119.49/NPSL

Barclaycard Arrival +: 2594.47/6500

Care Credit Medical Financing Card: 0.00/12000

Chase Freedom: 1515.02/2000

Chase Slate: 950.62/3000

Citi Diamond Preferred: 4500.00/10000

Discover Card: 796.00/2500

Express Next A-List Store Card: 108.03/3150

Target MasterCard: 274.08/2500 (the one and only statement that has already cut for the month)

Victoria's Secret Forever Angel Store Card: 155.09/6000

I'm assuming that after at least paying a few of these down with the small amount that I have, my score will see a slight bump and I will be more qualified to PC to a balance transfer card. So, my two big questions are:

1. What should I pay off/pay down first? I was thinking about just leaving the AMEX and CITI balances as is for the moment and pay off the smaller balances (Chase, Discover, Express, Victoria's Secret, etc.). I wanted to do this just because I feel like making any additional payment wont make a huge difference. Keep In mind that I'd like to PC one of my cards with any of these companies to a balance transfer card, so If i go with this plan, an AMEX or CITI balance transfer card is out of the window automatically.

2. After my modest payments, Which company is easiest to get a PC with? Although my scores aren't terrible, I have a super high UTIL on quite a few cards, which gets in the way of getting approved for anything.

Any insight on this helps! Thank you guys in advance.

Re: What to Payy Down with $2500

Revelate — Thu, 15 Dec 2016 19:11:04 GMT

Pay off 4 small balances and you should get a bump at least on my data; I have a line at 50% of revolvers w/balance being a ding on my file at any rate on all 3 bureaus. Actually as near as I can tell on my dirty file being under that is optimal for both EX/TU FICO 8, EQ is the odd duck for me having a second line at 33%, but either way you're at 9/11 now -> 5/11 should be a step in the right direction.

Beyond that it's hard to say; recent testing suggests there's different breakpoints for individual tradeline utilization between the bureaus and I am SUPREMELY irritated by that =/. Never thought trying to nail that down would be challenging but this is suddenly going to be a long term project.

Someone else would need to answer the BT target bit, but if I had a 690ish credit score and income I'd be looking at a consolidation loan personally.

Re: What to Payy Down with $2500

Coolermaster007 — Thu, 15 Dec 2016 20:33:04 GMT

You go girl ! Finish the job,max then all out Anyway gold premier requires full amount since its a charge card.

Re: What to Payy Down with $2500

Anonymous — Fri, 16 Dec 2016 14:04:29 GMT

I agree with the post above that says to tackle the small limit/balance cards first, getting several of those paid down to $0 could help your scores the most at this point.

Aggregate utilization will be the same regardless, so putting the $2500 toward something like your Amex account with the highest balance would likely result in zero score improvement. Bringing multiple accounts down to a zero balance though in terms of individual trade lines and number of cards with balances can certainly result in some more points, so that's the route I would go down if I were you.

Re: What to Payy Down with $2500

CreditCuriosity — Fri, 16 Dec 2016 16:36:05 GMT

OP is still going to have to pay off the Amex PRG NPSL as that is due in full each month unless they have and are using POT feature.. So really limits the options currently

Re: What to Payy Down with $2500

kristin93 — Fri, 16 Dec 2016 17:06:57 GMT

To clarify, I do have the POT feauture on my AMEX.

Re: What to Payy Down with $2500

thummel — Fri, 16 Dec 2016 18:06:28 GMT

I don't think from paying down just the 2500 would give you a significant score increase. That diamond preffered is at 45% and the blue cash utilization is a little higher too which are still going to be hurting your score. You might see a small score bump if you pay off the freedom and a few of the other small ones. What's going to be the best combination is up to you.

Re: What to Payy Down with $2500

nyancat — Fri, 16 Dec 2016 19:04:22 GMT

You don't provide enough information. Paying off the smallest balances is not necessarily financially wise, unless they're your highest interest. Pay off the most expensive debt first - that with the highest APR (or annual fees so you can cancel it).

Re: What to Payy Down with $2500

Anonymous — Fri, 16 Dec 2016 19:08:12 GMT

It depends on the goal of the OP. If it's to lower interest paid, obviously paying down the highest interest cards first is most important. The OP however suggested (at least I took it) that they were looking for a score increase, which would mean paying down some small balances to 0, regardless of the differing interest rates.

Re: What to Payy Down with $2500

nyancat — Fri, 16 Dec 2016 19:19:36 GMT

Ooops wrong thread! - Mod please del?

Re: What to Payy Down with $2500

nyancat — Fri, 16 Dec 2016 19:13:37 GMT

@Anonymous wrote:
It depends on the goal of the OP. If it's to lower interest paid, obviously paying down the highest interest cards first is most important. The OP however suggested (at least I took it) that they were looking for a score increase, which would mean paying down some small balances to 0, regardless of the differing interest rates.

Yeah, I saw that... but until they pay off all their current debt, they shouldn't really be seeking more credit anyway. So the best is to pay off highest APR first so they can pay off everything in the shortest time possible, then they'll have a much higher score and can start looking at new credit options with a clean slate.

Re: What to Payy Down with $2500

Anonymous — Fri, 16 Dec 2016 19:38:07 GMT

@nyancat wrote:

Yeah, I saw that... but until they pay off all their current debt, they shouldn't really be seeking more credit anyway. So the best is to pay off highest APR first so they can pay off everything in the shortest time possible, then they'll have a much higher score and can start looking at new credit options with a clean slate.

I agree with that 100%, but unfortunately the viewpoint that you and I both possess on this may not be the same as everyone, most important the OP.

Re: What to Payy Down with $2500

kristin93 — Fri, 16 Dec 2016 19:45:34 GMT

Yes, of course my ultimate goal is to pay down all of my current debt. I am not seeking more credit in order to spend (obviously, I've already had enough of that.)

I am seeking a balance transfer card in order to cut down on the cost I would be paying in interest, hence the reason I asked about what would give me the score bump the fastest (in hopes of qualifying for a BT card sooner rather than later to alleviate at least some of the costs.)

Thank you for the suggestions thus far! I am going through APR rates on all of my credit cards as we speak!

Re: What to Payy Down with $2500

nyancat — Fri, 16 Dec 2016 19:52:55 GMT

@kristin93 wrote:
Yes, of course my ultimate goal is to pay down all of my current debt. I am not seeking more credit in order to spend (obviously, I've already had enough of that.)

I am seeking a balance transfer card in order to cut down on the cost I would be paying in interest, hence the reason I asked about what would give me the score bump the fastest (in hopes of qualifying for a BT card sooner rather than later to alleviate at least some of the costs.)

Thank you for the suggestions thus far! I am going through APR rates on all of my credit cards as we speak!

Okay, definitely fair. Focus on APR, but if you have a high APR small balance, cut that down too. Two things are considered - % utilisation and numbers of cards with a balance. Both should be as low as possible. So, if you have, say, two 25% APR cards, and can pay off the small balance one, do it. If you have a 12% and a 25%, always pay off the 25%. In your case, the iffy thing is if they're close. Is it better to pay off a small balance 23% in full than part of a 25%, so that you can benefit from a score bump? MAYYYBEEEE

Re: What to Payy Down with $2500

Simply827 — Fri, 16 Dec 2016 20:46:31 GMT

I'm in a similar situation, so I'm gonna tell you what I would do. You probably already have a number of BT cards already. Go to each of your accounts and see what offers you may have for a BT on your account. Barclays, Chase Freedom, Citi, and Discover send them to me often. Go through all your accounts and find all the offers you're eligible for. If you can get a soft pull CLI for any of them do so. You'll want to zero out a card before you BT to it, otherwise things can get tricky with the payment allocation.

Since you only have $2500, let's say you pay off the Arrival + because you have an offer on it. I try to only use 40% of a card's limit for BT so as to not spook lenders. Now you have about $2600 you can use to BT. You can pay off your Freedom and Slate with that. Now if you have offers on your Freedom and Slate, you can BT from other cards to those and so forth and so on.

This is known as a debt shuffle and it can help you avoid paying the regular interest on your account. You want all of your interest rates to be as close to zero as possible. You shouldn't make a habit of it, but this is the situation you're in and this will help you pay down the debt faster.

Also I don't think your score is considered when you PC, correct me if I'm wrong, but I thought you just call up the lender and say you want to PC. Also if you PC, you won't get the introductory offers, so if there's a 0% interest rate and your current card is higher, your new card would have your old interest rate.

Good luck

Re: What to Payy Down with $2500

stellar — Fri, 16 Dec 2016 21:52:32 GMT

I would pay off Disco and ask for a cli after payment clears. They usually have 0% balance transfer offers.

Also, pay off store cards that have high interest rates.