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Hello, I have about 10 credit cards that are at full utilization mostly due to business expenses during a couple slow months this year. November and December will be good months to start or completely pay these cards off. Would you suggest I pay off the cards slowly over the next few months so that the lenders do not take this as an opportunity to chase my decreasing balance with new lower limits? Or is that not likely to happen? Most of the cards are about $5k with full utilization. And my fico tanked to about 627 due to the high utilization. Note - next time I will establish a line of credit so I do not do this again.
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@jeffstrikesback wrote:Hello, I have about 10 credit cards that are at full utilization mostly due to business expenses during a couple slow months this year. November and December will be good months to start or completely pay these cards off. Would you suggest I pay off the cards slowly over the next few months so that the lenders do not take this as an opportunity to chase my decreasing balance with new lower limits? Or is that not likely to happen? Most of the cards are about $5k with full utilization. And my fico tanked to about 627 due to the high utilization. Note - next time I will establish a line of credit so I do not do this again.
No, the best thing would be to pay them down as fast as possible.
I second SJ's suggestion to pay the balances down as fast as you're able. If nothing else, it makes financial sense to avoid interest.
You've already alluded to this, but consider business cards once your scores improve.
I agree with paying them off as soon as possible. Snowball those guys and throw all the extra you can to save the $$ in interest!
I agree that paying your cards off as quickly as possible is the smartest option. I actually paid off several high utilization cards last year and I haven't had any issues with decreased cl's. I decided to use the cards a few times each year for purchases that I have to make, such as gas, groceries, etc., just to show some use. This seems to have worked well so far. I've even received cli's on some of the cards.
PIF'ing makes you immune to AA and if they lower your limts, you could apply elsewhere since your FICO will be maxed out when you control the reported balances.
Thanks for all the answers, sounds like I will be paying off as fast as I can. There are quite a few different accounts but the most important ones are Bank of America, Discover, Capital One, Citibank, and various Synchrony accounts.
Synchrony is the one card issuer in the past who took my credit limit of $3200 down to $100 after being 2 days late on a payment from a mint.com synching issue (Paypal MC). I keep it open to help with average age and for my moviepass billing :-).
As others have said, paying down the cards quickly is important.
In general terms, paying off the highest interest rate cards first saves you money in the long term. Next if all rates are equal, I personally would pay each down to about 85% just so you're not fully maxed, and then focus on one card at a time paying it off. Once you've paid it, take the money you've been paying PLUS the money you would have normally paid on the now-paid card and work on the next. (It's what others have refered to as the snowball effect.)
It can look like a daunting task, but if you bite it off in small managable chunks... you'll make progress sooner than you might expect.
Good luck!