topic Re: $2k avail to pay down CC util-Advice for best bang for my buck?? in General Credit Topics

$2k avail to pay down CC util-Advice for best bang for my buck??

Anonymous — Sun, 16 Mar 2008 00:36:47 GMT

My current total util is 76%:

AMX - 1664/2100

Citi - 386/500

AMX - 837/1000

Express - 719/1100

Macys - 309/500

BOA - 1140/1600

Cap1 - 493/600

HSBC - 354/400

I just received $2k that I plan to use to pay towards this debt but can't decide exactly the best way to allocate it so that I get the biggest score increase. My main goal right now is to increase my scores.

Current Ficos: TU- 670 EQ- 647 EX- 645

Thanks for any suggestions!

Re: $2k avail to pay down CC util-Advice for best bang for my buck??

Anonymous — Sun, 16 Mar 2008 00:42:22 GMT

I would look at the intrest rate on each........pay them first......then take the money that you would be paying on them & apply that to the next highest CC. This way you are paying less in intrest & paying down on all CCs

Re: $2k avail to pay down CC util-Advice for best bang for my buck??

Anonymous — Sun, 16 Mar 2008 01:37:03 GMT

Assuming that these are all standard 17-22% interest.

AMX - 1664/2100

Citi - 386/500 PIF $386

AMX - 837/1000

Express - 719/1100

Macys - 309/500 PIF $309

BOA - 1140/1600

Cap1 - 493/600 PIF $493

HSBC - 354/400 PIF $354

= $1542

Remaining balance owed $4360

Then spread the last $458 accross the other accounts..

This helps greatly with over all utilization AND gets your total number of accounts with balances down to half.....BIG Fico score boost... close to 700 maybe over

If you are looking to save on interest further... for remaining balances... maybe look into a small personal loan from a credit union.... with the Fico score boost you should be able to get a good rate. You may be able to save 10% or more on interest of left over balance of approx $4000......

My two cents.

Keep us posted on your decision and effects that you see.

GOOD LUCK!

Message Edited by Carmeno on 03-15-2008 08:37 PM

Re: $2k avail to pay down CC util-Advice for best bang for my buck??

Anonymous — Sun, 16 Mar 2008 01:44:09 GMT

FICO goes by total UTIL and total CL it doesn't care % of use on 1 card

Re: $2k avail to pay down CC util-Advice for best bang for my buck??

Anonymous — Sun, 16 Mar 2008 01:50:19 GMT

But it ALSO takes into account how many accounts with balances and overall utilization for CC's

It's suggested to not keep balances on too many revolving accounts.

Hurts Fico.

Message Edited by Carmeno on 03-15-2008 08:50 PM

Re: $2k avail to pay down CC util-Advice for best bang for my buck??

Anonymous — Sun, 16 Mar 2008 01:58:00 GMT

It takes total CL and total UTIL thats all! If they added up all the CCs someone has I would be in deep @#%^

Re: $2k avail to pay down CC util-Advice for best bang for my buck??

Junejer — Sun, 16 Mar 2008 02:03:36 GMT

Newtoit, I am going to give a hybrid of the advice that you have already received. I would pay the following:

AMX - 837/1000
Macys - 309/500
Cap1 - 493/600
HSBC - 354/400

Total paid $1993. I would then take the payments that you were making to those and attack the hightest interest rate CC first.

The reason that I would do this is as follows:

You currently have high individual and overall utilization. You are probably being yelled at by FICO for too many accounts with balances. This way, you get overall uti down and individual uti on those four cards. FICO doesn't like you to have half or more of your open accounts with balances. New overall util is 50.2%, before you make your regular monthly payments.

GL

Re: $2k avail to pay down CC util-Advice for best bang for my buck??

Junejer — Sun, 16 Mar 2008 02:06:35 GMT

HappyDays, half or more of your open TLs with balances is what will put you in deep $#!^.

Re: $2k avail to pay down CC util-Advice for best bang for my buck??

Anonymous — Sun, 16 Mar 2008 02:29:08 GMT

"Too many accounts with a balance" is 20 points for me-

The same # of points between 19% UTL and 29% OVERALL UTL

I did not do the match on the above-

Unless applying for credit- PAY HIGHEST APR FIRST period.

The first question should be- FICO or $'s ?

ByrdMan wrote:
HappyDays, half or more of your open TLs with balances is what will put you in deep $#!^.

Re: $2k avail to pay down CC util-Advice for best bang for my buck??

Anonymous — Sun, 16 Mar 2008 02:34:09 GMT

Thank for clarifying ByrdMan and Timothy.

I know it has been commonly listed: Too many accounts with balances = Negative for FICO

And the only reason that I did not suggest paying off one of the Amex accounts in Full(or a big chunk) is the risk that Amex MAY do a credit line decrease after a major payment or PIF - which would hurt

ultilization again (step backwards)

I know that has been an issue recently with Amex when a cardholder who has normally carried higher

revolving balances on their Amex account(s), in addition to other revolving accounts with high balances, that when a big payment is made on Amex= CLD after payment posts to account

....especially if they are too many other accounts with balances or balances too high in comparison to limits.(in the eye's of Amex's)

I like to pay my Amex $100-300 at a time

My Two cents.

Message Edited by Carmeno on 03-15-2008 09:32 PM

Message Edited by Carmeno on 03-15-2008 09:34 PM

Re: $2k avail to pay down CC util-Advice for best bang for my buck??

Anonymous — Sun, 16 Mar 2008 02:50:16 GMT

I like Byrdman's presentation. Go for it.

Re: $2k avail to pay down CC util-Advice for best bang for my buck??

Junejer — Sun, 16 Mar 2008 02:53:19 GMT

Thanks Casino. There are no wrong answers though, provided the debt is being eliminated.

Re: $2k avail to pay down CC util-Advice for best bang for my buck??

Anonymous — Sun, 16 Mar 2008 03:03:18 GMT

Thank you both for that info. most of my cards are bal $0 thats why I never noticed. And I will remember!

I also do not like paying a little here & there so I keep most on a few cards & only use the others every 4-6 months........usually to feed my habit!!! chocolate

Message Edited by HappyDays on 03-15-2008 08:03 PM

Re: $2k avail to pay down CC util-Advice for best bang for my buck??

Anonymous — Sun, 16 Mar 2008 13:26:40 GMT

Thanks for all of your input. It is very helpful. You guys brought up a couple of very good points.

Recently I paid a big chunk on one of my AMXs and they then lowered my CL down to $1000 (they have actually done this twice with the same account - my initial CL was $2000 on both cards)
When I have ordered my Fico scores one of the "negative factors" was "too many accounts with balances".

And my main (only) goal right now is to raise my scores. I am looking to purchase a vehicle.

Re: $2k avail to pay down CC util-Advice for best bang for my buck??

haulingthescoreup — Sun, 16 Mar 2008 16:47:10 GMT

@Anonymous wrote:

FICO goes by total UTIL and total CL it doesn't care % of use on 1 card

That's not my experience. I have found that FICO definitely cares about both individual and overall util.

On the other hand, I can't find a quote from FICO about individual util on the "Expanded 'FICO High Achievers' " thread. Am I just dreaming this??????

This would mean that I could have a BT card maxed out, and if everything else is low enough, I wouldn't be penalized. Hard to believe, but nice if true!

Re: $2k avail to pay down CC util-Advice for best bang for my buck??

Anonymous — Sun, 16 Mar 2008 20:07:15 GMT

Yeah - I have heard before that Fico looks at total and well as indiv util. I guess different sites state different things.

Re: $2k avail to pay down CC util-Advice for best bang for my buck??

haulingthescoreup — Sun, 16 Mar 2008 22:22:44 GMT

Well, I've been checking around, and I'm finding both positions stated!

So now I'm worrying about all the times I've told everyone that they count equally. Shoot.

But everyone does seem to agree that whether or not individual util counts, or how much it counts for, maxing out (as in 85-90%) is a score-killer, as least temporarily.

Re: $2k avail to pay down CC util-Advice for best bang for my buck??

Anonymous — Mon, 17 Mar 2008 10:22:39 GMT

you don't give any dates but HSBC probably should be closed when you pay it off. you have alot of low limit cards ....do you have a good int. rate on this card?

Re: $2k avail to pay down CC util-Advice for best bang for my buck??

Anonymous — Mon, 17 Mar 2008 11:52:09 GMT

HSBC is at 21%. I got this card a while back when my scores were a lot lower.

Re: $2k avail to pay down CC util-Advice for best bang for my buck??

Anonymous — Mon, 17 Mar 2008 12:35:22 GMT

I would hold off on closing any cards until your overall utilization is way down....

If you pay the HSBC in full you may as well keep it open w/ zero balance... helps for now

.. closing it (after paid) while you still have some higher utilization overall will hurt you.

My two cents..