Help: What's the best PayOff Strategy?

[Anonymous]

Hello Board,

I have made a mistake. I've always been the person to pay my credit balance in full. However, I made the decision to share my account with others by opening up additional cards for others in my life. I currently have $7,620.23 in debt.

Capital One: $885.00 with an APR of 17.90%

Amex: 1,848.98 with an APR of 17.24%

Chase: $4,886.25 with an APR of 13.24%

What’s the best PayOff Strategy?

[doublespaces]

It would help to know what you have available on what cards with what interest rates and balance trasnfer fees.

[pastnow123]

As far as I know, you need to keep a minimum balance at statement date (1%-10%)

Always pay in full before due day to avoid interest, and show you're effectively managing the debt.

[castlefox]

If you want to pay the least about of money to the credit card companies/other detors, I think the "snowball" strategy works the best.   It goes like this >  Pay the min. on all of your debt except for the the debt with the highest APR.  The account with the hightest APR would be paid down with as much money as you can that month.

**This assumes you have at least 3months of emergency savings saved up at min.*****

Depending on your credit score you could ask for an APR reduction.  

[Anonymous]

Thanks for your response.

My CL is 1500 on the Cap1. That's 615 avail. With no fee for balance transfer.

Amex CL is 2K with 152 Avail. I didn't see the balance transfer fee for amex.

The Chase CL is 5500 with 613 avail. Balance Transfer of 0% APR or 1.99%.

I expect to be able to pay atleast 1600 on cc debt by the end of the month.

[Anonymous]

Castlefox,

I have a score of 685. Last year it was 761.

[castlefox]

When you are paying down the account with the highest APR you will reduce the amount of APR adding against you every month. 

Paying down your debts help will help get your utilization percentage down and in turn help you build to a high score.  

I would hold off on apply for a new credit card because your high utilization looks kinda scary to them.

[bichonmom]

You might want to talk with your local bank or CU about a loan, or look for promotions w/CCCs to see if you'd qualify for a new CC w/0% on BT.

Since *you* didn't wrack up this debt yourself, your bank/cu might be more willing to extend you a loan at lower % than your CCs.

In general, the best way is what was said already: pay off the highest-rate cards first, then work your way to the lower-rate cards.

[castlefox]

FYI> your utilization is calculated by your outstanding debt   (7600) devided by your available credit lines (9000).            7600/9000 = 84% for your general utilization.

They also look at per card utilization but I wouldnt worry about that as much right now.

Ideally a credit card comany would like to see 20% utilization or even less. 

Good luck paying down your debts!   It may see long and hard but you can do it.    Please keep us updated with how it goes.

[Anonymous]

 Thanks Castlefox and Bichonmom

I was thinking the best way was to tackle the cc with the largest balance. I’ll now tackle the cc with the highest APR.

...  and Castlefox I have four other cc’s (albeit store cards) with $0 balances. My total CL is $14,810. And thanks I will keep this thread updated on my repayment progress.