Best Way to Pay Down Debt

[shadanat]

I have $15K worth of credit card debt that I am about to pay off between four cards:

Cap One SavorOne

BOA CashRewards 

SDFCU Premium CashBack

Apple Card

Should I pay them all off at the same time? I don't want face any credit limit decreases or balance chasing. 

Any advice is appreciated - Thx

[mkhan1093]

There are generally 2 accepted "algorithms" for laying down debt like this, known as the Snowball and Avalanche methods, in which you pay down your debts either from lowest to highest balance or from highest to lowest APR.

Mathematically, the latter makes the most sense as you will accrue less interest and overall pay less money. Psychologically, the former makes more sense because you will wipe out account debt more easily and that can motivate you to keep the momentum going.

I'd go with one of these. Good luck!

[shadanat]

Thanks for the advice. Let me add more. I have the money to pay down the debt. Just want to know if I should pay it all this month to bring all cards to zero or space it out?

I just don't want any negative consequences for having no credit card debt. 

[coldfusion]

There is no real significant benefit to staggering the payoffs.   You might take a minor hit on your scores if all your bank cards report a 0 balance but that would most likely be more than offset from the positive impact from having $15K worth of balances paid off.

There really aren't any truly effective games you can play at this point to try to avoid any CLD or other AA.  That die would have already been cast and your payments would only act as the trigger for them to act. 

[shadanat]

Thank you. Very informative. 

[Anonymous]

Since you have it to PIF, that could be worth while and then go buy a tank of gas ⛽️ on one where you leave a small but not iddy biddy balance. Take a look at the AZEO threads. 

I saw you were concerned that they might decrease your CL's were you to PIF. I can't speak that. Perhaps cite the particular cards/search on those here for those FI's history of decreasing. 🙏🏻

[SouthJamaica]

---

@shadanat wrote:

I have $15K worth of credit card debt that I am about to pay off between four cards:

Cap One SavorOne

BOA CashRewards 

SDFCU Premium CashBack

Apple Card

Should I pay them all off at the same time? I don't want face any credit limit decreases or balance chasing. 

Any advice is appreciated - Thx

---

There is no way to ensure that you will not be hit with balance chasing. But it is not the usual thing. Usually they are just happy to be paid.

Just pay them down as fast as you can.

[SouthJamaica]

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@shadanat wrote:

Thanks for the advice. Let me add more. I have the money to pay down the debt. Just want to know if I should pay it all this month to bring all cards to zero or space it out?

I just don't want any negative consequences for having no credit card debt. 

---

It's ok to pay them all to zero, but just make sure that one of them reports a small balance before you pay it off, so that you don't get hit with the "all zero" penalty.

[Michizane]

Since you have the money, pay it down ASAP and maybe leave a small balance on one card atleast $5. Just make sure you are not paying interest on anything. 

You will most likely not get a balance chase unless you maxed out some cards, had a charge off, were late, and your scores dropped a ton. 

[MarkintheHV]

I was in a similar situation, and I paid mine down all in one shot.  Got a huge score jump once they payments posted.