Using cc's wisely, need advice

[Anonymous]

I've been going through a major s#@t storm, re-located, gone through 2  major fire evacuations, unemployed then new employment, and my new job had to close down temporarily due to the fire damage...too much in the last few months. Meanwhile I obtained a few credit cards before all this, but I've missed logging into this site and learning the best way to utilize my cards. Due to lack of wifi, I haven't been able to log into my cc accounts online, so I was hoping someone here could refresh my memory.

If anyone could chime in, I would greatly appreciate it.

These are my main 3 I use, which ones are best for gas, groceries, etc? Because I've had to relocate and been unemployed for 3 months, I've had to basically live on them until I've finally obtained work again, so I am slowly getting back on my feet. Which banks are the most crucial to pay off (obviously the higher apr, but as far as my reputation with each one, I want to stay in good standings). All I can do is make $100-$200 payments on them at a time. 

-Chase Freedom Unlimited 24.74% Unlimited 1.5% cash back on all purchases

-Capital One Quicksilver 21.90%

-NFCU Platinum 13.99%

Thank you for your suggestions.

[Anonymous]

#1 advice: set up autopay on ALL cards for the minimum due.  That'll save you from late payments.

#2 advice: post a list of all your credit cards including any not listed, along with their current balance and current credit limit, as well as how many days late they're reporting.

[Anonymous]

Thank you ABCD, so far I am not late on any of them. Good suggestion on the auto pay. I'm about $1,000 bal each on all 3 and trying to make at least $100 payment on them until I get back on my feet.

[Anonymous]

During the crisis period I would do minimum  on the 2 lowest interest cards and put min plus anything else I could on the higest interest until it is paid. The key is to not keep charging so once you make the minimum on each card keep the extra in savings until the next paycheck so you are sure you can afford to apply it to the highest interest card . You do not want to be in a situation where you run short one week after paying extra then you start having to charge more. 

[Anonymous]

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@Anonymous wrote:

During the crisis period I would do minimum  on the 2 lowest interest cards and put min plus anything else I could on the higest interest until it is paid. The key is to not keep charging so once you make the minimum on each card keep the extra in savings until the next paycheck so you are sure you can afford to apply it to the highest interest card . You do not want to be in a situation where you run short one week after paying extra then you start having to charge more. 

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Thank you nursemanit, that's been my downfall, every time i get a chunk of money, i'm paying the cc's and then having to use them again bc i thought keeping them active and earning the rewards, etc. would be a good thing. My next paycheck is coming up soon so I will take your advice. It has been so stressful seeing my balances up so high ($1,000 on each).

[Anonymous]

I'll go contrarian here against what 100% of others will tell you: don't stress paying off that debt as fast as possible if it means you don't have any emergency savings at all.

I would personally make the minimum payments while putting 100% of the remainder into an emergency savings account earning high interest.  Yes, you'll pay more CC interest to get there, but when the next financial emergency happens, you'll hopefully have $3000 in savings to rely on to help you make your minimum payments.

I follow the "don't stress interest rates if you don't have savings" style of paying down debt.  Emergency savings > avoiding interest.  Emergency savings > slightly high balances for 6 months.

Of course, pay down any credit card that is over 88% utilization individually because that's considered "maxed out" by FICO and other lenders, but otherwise I'd say build up your emergency fund first, and pay minimums until you have at least 1 month of emergency savings built and socked away at hopefully 1.1%-1.3% returns.

[Anonymous]

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@Anonymous wrote:

I'll go contrarian here against what 100% of others will tell you: don't stress paying off that debt as fast as possible if it means you don't have any emergency savings at all.

I would personally make the minimum payments while putting 100% of the remainder into an emergency savings account earning high interest.  Yes, you'll pay more CC interest to get there, but when the next financial emergency happens, you'll hopefully have $3000 in savings to rely on to help you make your minimum payments.

I follow the "don't stress interest rates if you don't have savings" style of paying down debt.  Emergency savings > avoiding interest.  Emergency savings > slightly high balances for 6 months.

Of course, pay down any credit card that is over 88% utilization individually because that's considered "maxed out" by FICO and other lenders, but otherwise I'd say build up your emergency fund first, and pay minimums until you have at least 1 month of emergency savings built and socked away at hopefully 1.1%-1.3% returns.

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ABCD2199, I cannot thank you enough.  This gives me peace of mind and less guilt while I build my savings back up. Thank you so much.

[Anonymous]

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@Anonymous wrote:

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ABCD2199, I cannot thank you enough.  This gives me peace of mind and less guilt while I build my savings back up. Thank you so much.

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Don't thank me, thank 3000 years of financial advice given out in practically every religious book or economics lesson until 1950 or so, lol.

And do not start your savings plan until you've committed to setting up ALL your DEBT bills on autopay (minimums) and promised to yourself to keep 2X your minimums in your payment checking account.  I suggest 3X your DEBT minimums in there just in case, but work those details out.

First set up autopay, then get 2X your autopay minimums in checking ALWAYS (never below), THEN set up your savings account until it's at 1 month minimum, 3 months preferred, 6 months A++++, THEN pay down your debts faster.

This is the 3000 year "trick" to getting rid of 50% of your anxiety in life, maybe 90% in some cases.  Interest doesn't cause much anxiety -- not having a backup emergency plan is the host of most anxiety for folks today.

Would you really care about your student loans or mortgage if you knew you could give your boss the middle finger and still make all your debt payments for 6 months?  It's freedom at 1.3% interest.

[Kree]

As an aside, IF you need better credit for a specific purpose, such as purchasing a replacement vehicle, or applying for a mortgage or something. This can count as an 'emergency' and there is nothing wrong with paying down a large chunk of utilization for a temporary boast to scores. You can always ride your credit back up  afterwards as you replenish your savings.

Fico does not care that 30 days ago you had a 50% utilization. It generally does not care if in 30 days you will again have 50% utilization. (although when applying to new cards, they might soft pull you 2-3 times over the next 6 months, and reduce your limit, or close your account, if they don't like where your numbers are heading, but if you already have high UTI, there probably isn't many good reasons to apply for new ones until your financial house is clean.)