Closed CCs, High Util on all or High Util on highest to lowest Interest Rate?

[Anonymous]

That's something my DH and I have thought about, but, the way I had it figured, a $4000 loan at 18%, that's the going rate for someone in the 500s area for 24 months, would put our payment at $267 a month.  On top of that, correct me if I'm wrong, and I think I might be, we'd still have to pay our minimum payment each month.  (Does this apply if there is a 0 balance?)  Even so, without the loan, I can safely pay off by by the first week of Feb at the latest.  Do I want the added payment just for an additional 6 months of history?  I don't know.  I hate to think that I could make a decision that will only help us now but hurt us in the long run.

[Anonymous]

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fused111 wrote:

May I suggest you and/or your DH start a second job, maybe a part-time one or sell some things. With your current CC debt, it's unlikely paying $600 for four months will get you very far and here's why. A good chunk of your payments will be eaten up by the over-the-limit fees and very high interest. Your focus should be on paying down the over-the-limit CCs and preventing the others from reporting as

maxed-out or over the limit. FYI, just because two of the four over-the-limit CCs are closed doesn't mean they are not factored in util% calculations. Closed CCs with balances are factored in util% calculations, one's w/o balances are not.

Message Edited by fused111 on 08-14-2007 08:57 AM

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Thanks for the advise.  My DH and I decided that we are going to start with paying all the OL CCs down to under their limits.  The next step has my wondering, some people think that it's best to have all of the CCs at the same util%.  Does this apply when they are all high or is it better to work on getting one at, say, 50% and the rest at 75%?

I just spent hours trying to figure it out but I think I've got it.  I plan to pay the closed CCs so that they are below their CL  (the others are all under or will be after the next payment.)  It will take me until November to do that.  After November, I plan on paying all of the CCs down as equally as I can so that the util% is equal, or as close to equal on all.  That will have everything paid off by March 1st.  How's that sound?

Message Edited by wendy125 on 08-14-2007 06:33 PM

[Anonymous]

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myhearts07 wrote:

What about a loan from our bank or credit union to pay off all the credit cards?  You may get a better rate and a more reasonable payment.  Have you looked into this?

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Would this hurt us?  $4500 @14.95% for 4 years.  This lowers our APR by half but extends the payments.  Of course, I can pay them off much earlier without a penalty, but in relations to our scores, how will a loan of this type effect us?

[fused]

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wendy125 wrote:

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myhearts07 wrote:

What about a loan from our bank or credit union to pay off all the credit cards?  You may get a better rate and a more reasonable payment.  Have you looked into this?

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Would this hurt us?  $4500 @14.95% for 4 years.  This lowers our APR by half but extends the payments.  Of course, I can pay them off much earlier without a penalty, but in relations to our scores, how will a loan of this type effect us?

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A loan would help. If you take the money and pay down all of the CCs balances to < 50% util you should see a bump in your scores, < 30% util better and 1-9% util reporting is ideal. It's unlikely you will see much of a drop in your scores from a new installment account. Your scores can only improve by paying down the debt. Always try to have as few CCs as possible reporting high util. One more point, CC debt and util%'s carry considerably more weight than installment debt and util. I can't help but think if you do pay down all the CCs to 1-9% util and it reports, your scores should rise substantially!

[Anonymous]

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fused111 wrote:

A loan would help. If you take the money and pay down all of the CCs balances to < 50% util you should see a bump in your scores, < 30% util better and 1-9% util reporting is ideal. It's unlikely you will see much of a drop in your scores from a new installment account. Your scores can only improve by paying down the debt. Always try to have as few CCs as possible reporting high util. One more point, CC debt and util%'s carry considerably more weight than installment debt and util. I can't help but think if you do pay down all the CCs to 1-9% util and it reports, your scores should rise substantially!

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Yes, if we get approved, I plan on paying them off to 0%.  I'm trying to decide if I want to use them and then pay them off at the end of the month at, if so, to what extent: groceries and gas, other household bills, or just a couple of things here and there.

[fused]

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wendy125 wrote:

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fused111 wrote:

A loan would help. If you take the money and pay down all of the CCs balances to < 50% util you should see a bump in your scores, < 30% util better and 1-9% util reporting is ideal. It's unlikely you will see much of a drop in your scores from a new installment account. Your scores can only improve by paying down the debt. Always try to have as few CCs as possible reporting high util. One more point, CC debt and util%'s carry considerably more weight than installment debt and util. I can't help but think if you do pay down all the CCs to 1-9% util and it reports, your scores should rise substantially!

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Yes, if we get approved, I plan on paying them off to 0%.  I'm trying to decide if I want to use them and then pay them off at the end of the month at, if so, to what extent: groceries and gas, other household bills, or just a couple of things here and there.

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Place your CCs in a deep freeze!

[Anonymous]

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fused111 wrote:

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wendy125 wrote:

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fused111 wrote:

A loan would help. If you take the money and pay down all of the CCs balances to < 50% util you should see a bump in your scores, < 30% util better and 1-9% util reporting is ideal. It's unlikely you will see much of a drop in your scores from a new installment account. Your scores can only improve by paying down the debt. Always try to have as few CCs as possible reporting high util. One more point, CC debt and util%'s carry considerably more weight than installment debt and util. I can't help but think if you do pay down all the CCs to 1-9% util and it reports, your scores should rise substantially!

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Yes, if we get approved, I plan on paying them off to 0%.  I'm trying to decide if I want to use them and then pay them off at the end of the month at, if so, to what extent: groceries and gas, other household bills, or just a couple of things here and there.

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Place your CCs in a deep freeze!

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LOL.  Will do!  Then I won't be charged minimum payments because there's nothing on them, right?

[fused]

Wendy:

I was just joking! Just make sure to be responsible with your CC usage, never pay late and don't forget to pay the AF's if you have any.