topic Re: Cards at 71% in Credit Cards

Cards at 71%

Anonymous — Wed, 09 Sep 2009 21:36:32 GMT

I have 6 cards they are at 67%, 76%, 94%, 90%, 91%, overal I am at 71% should I pay down my highest interest which is the one that is at 67% or lower the ones that are closer to maxed in the 90% I'm wondering what strategy will give the best chance of credit score increase if possible. I'm looking to buy a home.

Re: Cards at 71%

Anonymous — Wed, 09 Sep 2009 22:14:32 GMT

I would pay off the card with the highest rate first. You'll pay your cards off faster and will be able to save more for a down payment. You'll also be out of debt quicker and be in less debt when you have a mortgage. But if your goal is to play the FICO game and have less concern with the total amount of money you'll be giving the credit card companies, then use the strategy that will lower your utilization.

The no brainer to me is to pay off the highest interest rate first.

Re: Cards at 71%

Anonymous — Wed, 09 Sep 2009 23:41:49 GMT

On the contrary, what are the balances of the cards? Limits? I'd pay off the lower limit cards first and then tackle the big boys. That way just worked better for me. Made me feel better zapping one card off at a time rather than paying piddly amounts to each one every month. Then again...if you have a HUGE interest rate on a $10,000 balance, I'd go after that one first.

Re: Cards at 71%

Anonymous — Thu, 10 Sep 2009 00:05:57 GMT

Welcome to the forums!

If you have CC's with smaller balances I would pay them off first. (To zero and keep them there!) Then go back and attack every one of the remaining cards in turn (any order you like) until each has UTIL < 35%, then go back on a third pass and take them to zero. Each stage will yield some tangible FICO results.

Re: Cards at 71%

pattycake — Thu, 10 Sep 2009 04:56:37 GMT

@Anonymous wrote:
Welcome to the forums!

If you have CC's with smaller balances I would pay them off first. (To zero and keep them there!) Then go back and attack every one of the remaining cards in turn (any order you like) until each has UTIL < 35%, then go back on a third pass and take them to zero. Each stage will yield some tangible FICO results.

+1.

The sense of accomplishment you get from snowballing the accounts is what motivates a lot of people into pay off debt.

Good luck to you, and attack those CC balances!!!

Re: Cards at 71%

Tons_of_Debt — Thu, 10 Sep 2009 15:44:30 GMT

As pattycake said, you'll get a huge sense of accomplishment if you snowball them. Unless you have a mega card with a high interest rate, the difference in interest paid will be negligible anwyay.

Re: Cards at 71%

Karatz — Thu, 10 Sep 2009 16:07:19 GMT

@Tons_of_Debt wrote:
As pattycake said, you'll get a huge sense of accomplishment if you snowball them. Unless you have a mega card with a high interest rate, the difference in interest paid will be negligible anwyay.

Calculate it out for yourself in rough terms. Is saving $20 bucks (or X) over 6 months worth it or would you rather fell like "hot dog paid off another one today"?

Feeling good often adds an incentive to do an extra shift (im on my 13th of 17 straight days of working 12's), or to cut costs somewhere you may not otherwise.

Bottom line, pay em off as fast as you can let yourself to

Re: Cards at 71%

haulingthescoreup — Thu, 10 Sep 2009 23:53:31 GMT

Or do both!

If you have 2 or 3 low-balance cards, pay them off first. As described above, as you pay off each one, take the money that you were applying toward them and add it to what you were paying on the next card. Once you have a couple knocked off and that extra money available, it might then be smartest to go after the highest-interest card, then next-highest, and so forth.

And it goes without saying that during this time, you don't use your cards, except for maybe once every 2-3 months for something you would have had to buy, like a tank of gas or groceries. Pay that charge off online the moment it posts. Don't let your balances start creeping up again.

Re: Cards at 71%

Anonymous — Fri, 11 Sep 2009 00:33:55 GMT

@haulingthescoreup wrote:
Or do both!

If you have 2 or 3 low-balance cards, pay them off first. As described above, as you pay off each one, take the money that you were applying toward them and add it to what you were paying on the next card. Once you have a couple knocked off and that extra money available, it might then be smartest to go after the highest-interest card, then next-highest, and so forth.

And it goes without saying that during this time, you don't use your cards, except for maybe once every 2-3 months for something you would have had to buy, like a tank of gas or groceries. Pay that charge off online the moment it posts. Don't let your balances start creeping up again.

I prefer a hybrid approach. It just makes the most sense to me.