topic Re: Pay down 1 cc a lot or pay down 3 a little? in General Credit Topics

Pay down 1 cc a lot or pay down 3 a little?

renov8r — Thu, 17 May 2007 00:32:10 GMT

I have some cash to pay down some credit cards. I have 4 ccs, one with 15% utilization and 3 with 90%+ util. Do I bring one of the cards with 90% utilization rate down to 30% or bring all three down less?

Re: Pay down 1 cc a lot or pay down 3 a little?

Anonymous — Thu, 17 May 2007 01:16:18 GMT

Personally, I would pay down the one with the highest interest rate first and save yourself some money. I don't think it really matters if you only pay down one because regardless, you're utilization will still be on the high side.

Re: Pay down 1 cc a lot or pay down 3 a little?

Tuscani — Thu, 17 May 2007 11:38:29 GMT

Worry more about saving money, not your credit score. Pay down highest rate cards first!

Re: Pay down 1 cc a lot or pay down 3 a little?

renov8r — Thu, 17 May 2007 14:35:07 GMT

Thanks for the input - that narrows it down to two of the three cards. I may be able to pay both of them down significantly. How 'magic' is the 30% level?

Re: Pay down 1 cc a lot or pay down 3 a little?

Anonymous — Thu, 17 May 2007 14:37:03 GMT

Credit utilization is a big part of your score. The less you use, the more responsible you look and it shows you're not depending on your credit cards as a way to get by.

Re: Pay down 1 cc a lot or pay down 3 a little?

renov8r — Thu, 17 May 2007 14:41:52 GMT

Yeah, I learned this the hard way. I have ficos around 700, but a HELOC that has been maxed out starting a business. I get zero percent card offers daily, but was turned down twice when I applied. They added my HELOC to my CCD debt and said I had over 100k of revolving debt. I plan on converting the HELOC to a fixed rate 2nd mortgage, which should help. I am paying down the CCD's anyway, but I thought it would be nice to transfer a couple of balances to a zero interest rate card so the payments would all go to the balance...

Re: Pay down 1 cc a lot or pay down 3 a little?

Tuscani — Thu, 17 May 2007 17:59:55 GMT

renov8r wrote:
Thanks for the input - that narrows it down to two of the three cards. I may be able to pay both of them down significantly. How 'magic' is the 30% level?

You will notice a difference.

Re: Pay down 1 cc a lot or pay down 3 a little?

Anonymous — Thu, 17 May 2007 22:18:40 GMT

What are the APRs, balances and limits?

Re: Pay down 1 cc a lot or pay down 3 a little?

renov8r — Thu, 17 May 2007 22:45:14 GMT

Wells Fargo 21.50%! $4,400 balance and limit

SDCCU 12.90% $8,353.14 balance, $8,500 limit

Citi/Shell 16.24% $4,942.76 balance, $5,000 limit

I plan on paying $3,100 on the Wells Fargo to get it below 30% now, and then soon I should be able to put another $3,500 on the Citi/Shell to get it below 30%. Then I plan on converting my HELOC to a fixed 2nd mortgage.

At that point I should have 3 cards below 30% and I can go to work on the SDCCU. The problem is, I need to spend some additional money on home repairs - should I open another credit line to keep the overall usage under 30%?

Re: Pay down 1 cc a lot or pay down 3 a little?

Anonymous — Fri, 18 May 2007 03:41:14 GMT

If you can pay the CCs down under 50% util good, below 30% even better. With 700 FICOs, you should get approved for a 0% offer without a lot of trouble. Once the CCs are paid, and the CRAs report the balances, apply for AMEX Clear and Blue. More than a few folks have $10K and $20K limits on Blue, and one poster on CIC has a $50K limit on Blue.

How much is available on your HELOC? I would go ahead and tap that for the home repairs, if it's enough to cover what you expect to spend. Then refi. With your CCs holding at 30% or less, I would expect your FICOs to climb up over 720. At that point, you're at the pinacle of good mortgage rates.