Credit Card Paydown Strategy

[PlasticOrPlastic]

I was just wondering when everybody here carries a balance, do you not use the card or keep using it?  I used to PIF but recently I purchased some stuff with 0% interest as well as did a couple BT's as to not pay 29.99% interest to Wells Fargo for furniture.  I also like having just one or two card payments a month.  I guess I find myself using my cards for everyday stuff as well (gas, groceries, food, etc) and it feels like everytime I make a nice payment $300+ it just fills back up again. 

I guess my question is should I forfeit some of my rewards for awhile until I'm down at an amount I can PIF again?  Obviously having a balance and paying interest is eating into if not completely wiping out any rewards....

Any thoughts or strategies you use?

[GoodCredBen]

I carry a relatively high balance with my overall credit limits, but as of today, all of my balances will be on one card, and i will be making a hefty payment to that card rather then fighting 3 different lenders to pay down some high APR (29.99% on one of them) .... 

i find it is easier to have one central location to then chop it down from there.... all the other cards, will have 0 balance. 

Since you only need one card reporting a minimal balance for scoring purposes, it will help a ton. 

[PlasticOrPlastic]

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@GoodCredBen wrote:

I carry a relatively high balance with my overall credit limits, but as of today, all of my balances will be on one card, and i will be making a hefty payment to that card rather then fighting 3 different lenders to pay down some high APR (29.99% on one of them) .... 

i find it is easier to have one central location to then chop it down from there.... all the other cards, will have 0 balance. 

Since you only need one card reporting a minimal balance for scoring purposes, it will help a ton. 

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I did think about BT'ing all my balances on to my Discover at 0% interest for 12 months, that way I could also send large payments a couple times a month to that one card.  Problem is if I BT my other balances my card will be at like 93% UTIL...that doesnt look good at all. 

[GoodCredBen]

well thats exactly what i am doing... it doesnt look good for a short while, you are correct... but when apping for anothing card they are going to look at your overall credit util, not just for that one card.....

to be honest, discover is going to look and see you are using good on their card, and maybe even give a CLI

[Miscellamy]

I personally think that, unless you need to apply for more credit soon, you're better off taking the util. hit on the Discover card so you're not paying interest. (Although, maybe it would be worth calling Discover and asking for a CLI in light of a balance you'd like to transfer? Hopefully someone else will chime in b/c I have no idea whether that's a) wise or b) likely. But it's a thought). 

I recently did this as well. I generally pif every month. But I recently had a whole raft of unexpected expenses that ran my balance higher than I could pif. I took advantage of a 0% BT offer, moved it over, and am paying enough each month to get rid of the balance within the promo period. 

[PlasticOrPlastic]

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@GoodCredBen wrote:

well thats exactly what i am doing... it doesnt look good for a short while, you are correct... but when apping for anothing card they are going to look at your overall credit util, not just for that one card.....

to be honest, discover is going to look and see you are using good on their card, and maybe even give a CLI

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Oh sure now you tempt me with possible CLI's as well   Maybe I'll just do the BT, probably be able to get a large enough payment sent in that it wont even report the full balance to the CRA's.  Thanks for the input GoodCred! 

[GoodCredBen]

Exactly what i am doing, if they give you the 0% then why not.... i get 0% for 18 months on BT ... so i am going to use it lol.... I think as long as you havent had a recent CLI with discover, and you havent had anything tragic happen with your credit, they may want to do a hard pull, but you would probably get a CLI. 

[PlasticOrPlastic]

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@Miscellamy wrote:

I personally think that, unless you need to apply for more credit soon, you're better off taking the util. hit on the Discover card so you're not paying interest. (Although, maybe it would be worth calling Discover and asking for a CLI in light of a balance you'd like to transfer? Hopefully someone else will chime in b/c I have no idea whether that's a) wise or b) likely. But it's a thought). 

I recently did this as well. I generally pif every month. But I recently had a whole raft of unexpected expenses that ran my balance higher than I could pif. I took advantage of a 0% BT offer, moved it over, and am paying enough each month to get rid of the balance within the promo period. 

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I actually just did a CLI with Discover because of a table my DG and I purchased at Ashley, Wells Fargo financed it but the 29.99% was just dumb (60 days 0% on a $1200 table really?)  Anyway that was my DG card so I put it on my Discover.  I wont be needing credit anytime soon so maybe the high util and $0 balance on my other 5 cards wont be so bad.  I really cant beat the Discover BT at 0% for 12 months (there is a 3% BT fee but oh well). 

Thanks for your ideas!

[Creditaddict]

I think having 1 card at 90%+ util. and having remaining cards at $0 or maybe 1 other one for your monthly spending and PIf and all others reporting $0 is WAY better for credit score then say having 5 accounts all report balances even if they are under 20%.

I have always seen Fico scoring harder on more accounts with balances then 1 account with high util.

[PlasticOrPlastic]

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@Creditaddict wrote:

I think having 1 card at 90%+ util. and having remaining cards at $0 or maybe 1 other one for your monthly spending and PIf and all others reporting $0 is WAY better for credit score then say having 5 accounts all report balances even if they are under 20%.

I have always seen Fico scoring harder on more accounts with balances then 1 account with high util.

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Thanks Creditaddict, currently I have 4 cards reporting a balance my total util is 16% across all accounts.  If I BT those over to my Discover card, I'd have the 1 card reporting right around 98% UTIL.  I would however be sending $400-$500 as soon as the BT went through, so that would dent that balance a bit.  You dont think that would be bad for FICO scoring or Discover for that matter?  I really dont want them thinking whoa this guy just went up to 98% util...shut him down