topic Re: What should I do with 8 grand. in Credit Cards

What should I do with 8 grand.

Anonymous — Sat, 01 Feb 2014 15:59:36 GMT

Good Morning,

Here is a little history, I closed on a mortgage 2011 and since then I have pretty much maxed out all my available credit. My current utilization is 61% out of 60 thousand available credit. I have a total of 8 credit cards and 4 retail cards. In addition, I owe 28000 on a 420000 car loan and have cosigned for my wife on a 25600/26000 loan.

I have never missed a payment, and I do not have any baddies. My account history is 12 years a AAOA is 4 1/2 years. According to MyFico my Equifax is 638.

As of today one credit limit has been decreased by 2500.

Here are my balances and limits:

Card 1 935/8200 Military Star

Card 2 1200/1500 Capital One

Card 3 1235/1400 Capital One

Card 4 1919/2000 USAA

Card 5 1889/2000 Chase

Card 6 2200/2500 Capital One

Card 7 3800/4500 Walmart

Card 8 4700/5000 Capital One credit limit decreased from 7500

Card 8 4800/8000 Lowes

Card 9 6200/6500 Penfed

How will you suggest I utilize the 8000 grand; Pay off 5 small card limits or pay off the higher interest cards? According to MyFico the top three things that are hurting my score are utilization, multiple accounts that are maxed out, and multiple accounts carrying and reporting balances. If I reduce my utilization down to 10 percent my score will increase to 708-748 according to the MyFico Simulation.

Thanks in advance.

Re: What should I do with 8 grand.

youngandcreditwrthy — Sat, 01 Feb 2014 16:07:38 GMT

I think that even if you pay these accounts down, you will get balance chased.
Why do you have so many balances?
If you knew you were going to rack up these balances, you could have gotten higher cls to begin with to avoid high util. At this point, most of your creditors are probably watching you closely.

Realistically how long will it take you to pay all of these down to 10%?

Re: What should I do with 8 grand.

youngandcreditwrthy — Sat, 01 Feb 2014 16:08:10 GMT

I think you need a good balance transfer card, but idk of you can get approved for one.

Re: What should I do with 8 grand.

Anonymous — Sat, 01 Feb 2014 16:10:08 GMT

I think I'd throw up on a daily basis if I owed almost $40,000 in credit card debt. Heck, I was behind by just over $5,000 last year before we were able to pay it all off when we bought our house and I worried every single day. I mean nothing by this, just saying.

I'd start by paying down the ones you have the highest utilization on and at least get those numbers down. A lot of people want to start small to make you feel like you're getting the ball rolling but my theory is start big and tackle that one first. Kinda like they say to take down the biggest, meanest guy in the prison to show everyone else you are serious and wont be picked on!

Re: What should I do with 8 grand.

Anonymous — Sat, 01 Feb 2014 16:13:03 GMT

In all honesty youngandcw, I was living beyond my means. I furnished the new home, bought my wife a new wedding ring and went through 30 grand in a year. Nevertheless, I can pay off all the debt in about a year in a half. In the mean time I'm just trying now to repay all the debt and have my score increase.

Re: What should I do with 8 grand.

Anonymous — Sat, 01 Feb 2014 16:15:25 GMT

Thanks RockySC,

I think your example make a lot of sense.

Re: What should I do with 8 grand.

clocktick — Sat, 01 Feb 2014 16:20:27 GMT

Do any of those happen to have 0% interest? Does the Lowes card have deferred interest right now? What are your highest/lowest interest cards? Is your primary goal right now to pay your cards off or keep your FICO maintained for something?

Re: What should I do with 8 grand.

Anonymous — Sat, 01 Feb 2014 16:26:22 GMT

Thanks clocktick,

I do not have any zero interest cards. The Lowes card do not have deferred interest. My lowest is 9 percent and my highest 24; however, my lowest is the military star card and the highest is the Lowes. During all this madness, I have manage to get a bank of america card, Rooms to go and credit limit increases with Lowes and Walmart. My primary goal is to get out of debt, increase my credit limits and get a new car (in about 2 years).

Re: What should I do with 8 grand.

Anonymous — Sat, 01 Feb 2014 16:28:35 GMT

I think it would be helpful if you maxed a few of your cards, let them post, them pay if off immediately.

Re: What should I do with 8 grand.

Anonymous — Sat, 01 Feb 2014 16:31:05 GMT

Thanks megaman1,

Could you please explain? Pretty much all the cards a maxed out.

Re: What should I do with 8 grand.

clocktick — Sat, 01 Feb 2014 16:32:46 GMT

After the $8000, how much can you throw at your credit cards each month roughly?

Re: What should I do with 8 grand.

Anonymous — Sat, 01 Feb 2014 16:34:12 GMT

Clocktick,

About 1500.

Re: What should I do with 8 grand.

Josh2942 — Sat, 01 Feb 2014 16:47:52 GMT

This is crazy bro! I would suggest paying those store cards because im sure the interest rate is over 15%.

Re: What should I do with 8 grand.

Anonymous — Sat, 01 Feb 2014 16:51:17 GMT

Thanks Josh,

Yes this is crazy but sh*t happens. To be honest the only store card that has a high interest rate is Lowes; I only have 3 store cards carrying balances.

Re: What should I do with 8 grand.

dabrian — Sat, 01 Feb 2014 16:58:42 GMT

I would payoff starting with the highest apr. This probably isn't the optimal thing to do fico score wise but atm your credit score is the least of your concerns. If your successful over the next 4-6 months in paying down $1500 hundred a month I would bet you would then qualify for balance transfer card (chase slate,etc).

Re: What should I do with 8 grand.

Kenny — Sat, 01 Feb 2014 17:01:25 GMT

I agree --- pay high interest first --- when you pay off the lowe's then ask for a CLI as well.. that should help with utilization. (This is the time to be asking everyone for a CLI... I wouldn't do HPs but if they are SP then ask.)

Re: What should I do with 8 grand.

Anonymous — Sat, 01 Feb 2014 17:04:02 GMT

Dabrian, thanks. Your suggestion makes perfect sense.

Re: What should I do with 8 grand.

Anonymous — Sat, 01 Feb 2014 17:06:33 GMT

Kennys2006 thanks,

Even when my Lowes card was maxed out the increase my credit limit a total of 3 times in a year. GECRB gives out credit limit increases nearly ever 4 months for me. I have perfect payment history with every account.

Re: What should I do with 8 grand.

Themanwhocan — Sat, 01 Feb 2014 17:11:06 GMT

I would pay everything down ASAP so that all creditors see that you do not have cards near their limits, not their cards and not any competitors cards. If you can call Capital One and convince them not to rate chase you on all 4 cards, that would be good too.

It would seem you could get to 60% usage by paying $7903. That would be my suggestion.

Re: What should I do with 8 grand.

clocktick — Sat, 01 Feb 2014 17:11:06 GMT

If I have all of my calculations correct, your utilization now is around 78% and the $8000 will bring it down to around 56%...that is, until the statements hit again and the new interest is tacked on. It seems your minimum payments on these in total is around $600 or just under?

Is your Military Star 8200 or 8700 (looking at your siggy)?

I think I would pay off the Lowes which leaves 3200. I think I would move cards 2, 3, 4 and 5 over to the Military Star IF they have a good balance transfer rate or 0%. Do you have a personal relationship with them where you could possibly get a CLI? That would bring that balance to 7178/8200 and you'd have to pay the minimum which is probably around $145ish afterwards. That leaves you with 3055 left and 5 cards reporting 0 balance.

Oops, i Just realized you have 2 cards that say "card 8" so you'd have 5/10 cards reporting 0 balance.

I'm not done yet but am wondering is the Bank of America card the same as the Rooms To Go card or are they 2 separate cards? If separate, what is the BofA CL?