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Credit Card Utilitzation and Payoff

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Anonymous
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Credit Card Utilitzation and Payoff

Hello, Im currently in the process of paying all of my cards off. I have several cards with $3000 limits that are almost maxed out as well as smaller cards around the $500-$1000 range. Which would help my credit the most and fastest..............paying off the larger cards first while making smaller payments on the smaller cards or paying off the many smaller cards first and then tackling the larger cards..........I have alot more smaller cards than larger cards and their total make up a larger limit then the larger limit cards put together.

 

For instance:

Large cards total $8000

Small cards total $10000

 

Thanks

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1 REPLY 1
Anonymous
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Re: Credit Card Utilitzation and Payoff

If you have any cards with balance transfer offers for 0%, transfer the balance on the higher interest rate cards to the zero rate offer cards - but only if doing so will not spike your credit utilization to unsually high levels on those cards. You want to get things paid down but in a responsible way that won't spook your lenders by spiking use of one or more cards out of a reasonable range.

 

Also, if you can either move small debt from cards over to a zero rate card using a balance transfer or pay ithe small balances off outright, you will have  more zero balance cards overall and that also weighs favorably into your overall FICO score and your overall profile. It would be ideal to have less than 50% of your cards reporting a balance.

 

I think you need to look at your individual profile and the cards involved (and balances on each card), and decide on a strategy. One goal would be to get cards that are close to the limit down first to help your overall profile and utilization. Paying off the small balance cards feels good and helps you get more zero balance cards, which is good, but if you have some cards at 80% utilization, I personally would attach those first. Your plan can be a comprehensive approach that includes some of each - attacking high utilization cards while also zeroing out low balance cards as quickly as possible. Hope this helps.

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