Payment allocation

[Anonymous]

Hi guys,

I'm looking for a bit of advice on which card to pay first. Here is my situation. I have a chase freedom card with a 13k limit and an 8k balance, at 18% APR. I also have a Citi Costco card with 8.5k limit and 8k balance at 15% APR. 

I receintly completely paid off my HSBC Cash card. Made it a few months after the promo 0% APR expired, but nonethelss happy to have made it. A few days ago HSBC almost doubled my credit limit on that card on their own. I didn't ask for it so it was a pleasant surprise. Went from 4k to 7.5k limit. Today, I received a BT offer from HSBC offering me another 0% APR for 12 months. Another pleasant surprise so I'd like to take advantange of it, but I dont wanna max it out so I decided to only take out 4k. The question now is where should I pay the 4k?

Chase utilization is at 60% while Citi utilization is 94% so it would seem that I would benefit more by throwing the 4k at Citi. But interest is higher at Chase so every month I get hit with roughly 130 interest fee compared to 115 from Citi so it seems like I would benefit more by throwing it at Chase instead.

The issue I have with Citi is that as soon as I make a larger payment they like to cut my limit. I have a Citi Simplicity that just came out of intro period with 3k balance and 3k limit. (Used to be 4,200 when I started) Last month I made a 1,500 payment specifically in order to get below 50% on this card. And as soon as I made the payment Citi reduced my limit to 1,400 thus making my utilization over 100%. Total **bleep** moment. 

If I throw the BT money at Citi Costco whats the chance that they will again drop my limit like they keep doing with Simplicity? The only reason for me to put it on Citi is again specifically to reduce the utilization %. If they reduce my limit by 4k I'm gonna be at the exact same ratio, but with less credit so it would seem like a total waste of money. 

Alternatively, is it possible to call customer service and make some sort of deal with them? Like that I will prioritize paying down Citi balances if they stop screwing me over?

Thank you all for your imput. Really appreciate your advice.

[gdale6]

Always pay off higher APR balances first, Citi is likely to continue to do what they are doing so I would not give them an extra penny.

[FlaDude]

Unless you really need a score boost in the short term (which is not assured, given Citi's balance chasing), I'm with @gdale6, pay Chase. It will save interest and do more for your overall UTI assuming Citi will balance chase and Chase won't.

[Anonymous]

Thank you gdale6. That makes a lot of sense. Really appreciate your help.

[Anonymous]

Since Citi is balance chasing you paying them first won't help your scores or utilization, so I'd pay down Chase first to save on interest and help utilization.  It will also reduce the chances that Chase will follow suit with CLDs.  Then once Chase is paid off, start chipping away on the Citi and don't sweat the balance chasing... when it reaches whatever limit they deem suitable for your profile and their risk assessment the CLDs will stop.

[Citylights18]

One tactic I never really used but sounds good is to take a 12 month 0 APR offer on a card and concentrate all of your spending there. Let the balance revolve and then use the extra cash flow to concentrate on paying off a high interest card.

Works well with Discover as they have the 18 month intro offer. Plus they don't give you cli love for a while anyways.