Utilization/consolidation question

Anonymous · ‎11-29-2007

Hi! I'm brand new to the site. So any advice you could give would be much appreciated. I just got married and my wife and I both had credit card debt. I consolidated the debt to one card with a $13,000 limit. The total balance on the card is $12,000. I know, yikes!! I've read various places that balance to limit ratio should be less than 25%. Does that mean of all cards, or each card individually? I guess my hypothetical question is this: is it better to have a $6,000 balance on each of two cards with $13,000 limits, or better to combine that debt onto one card? Combining all our cards, our balance to limit ratio is very good. We have other cards available and could split it up if we wanted. And we both have otherwise good credit (Equifax FICO scores of 732 for me and 690 for her).

Thanks again for any help you could give.

Anonymous · ‎11-29-2007

Hi ae, and welcome to the forum.

1. Utilization is calculated BOTH on individual cc's AND all total's combined.
2. IMO, and it's only my opinion, it's better to have lower utils spread over all your cards, than low utils on most cards, but a HUGE util on one. Even if it means moving money around from one card to the other. But you still have the overall debt, obviously.

The obvious answer is to pay down the balances, as much as comfortably possible, in the shortest time.

Super congrats to you all's marriage. May your marriage live long and prosper.

Hope that helps a little. I'm sure others will chime in and offer their advice/opinion.

P.S. you have very good scores! Guard it carefully. So hard to get...so easy to loose...like money! lol

Anonymous · ‎11-29-2007

Thanks for your help Sylvia! I appreciate your time. I have a few other questions, and I certainly don't expect you to answer all of them, but if anyone else out there also has some advice, it would be much appreciated.

1) I transferred all my CC debt to one card because it is at 0% through March 2008. At that time I was going to apply for a new card just to maintain a 0% on balance transfers (cuz I'm a cheapskate like that). Problem is, I am going to buy a house in Summer (June) 2008, and I've read that it's not a good idea to apply for a new card right before applying for a mortgage. So what is the closest to applying for a mortgage that you would recommend applying for a new CC? If I applied for the new CC now, or early December, would I be OK by next June/July?

2) Do CCC's report to the credit bureaus monthly? so if I have a $12,000 balance on my CC this month, PIF next month, will it show as $0 in my credit report in a couple months?

3) Does transferring a balance to a card you already have result in an INQ on your credit report?

4) Is it possible to have too much available credit? I think right now I probably have close to $40,000 of available credit on my CC's.

Again, thanks to anyone who has any advice to offer. These forums are fantastic!!

Message Edited by ae76 on 11-29-2007 12:22 PM