Which to Pay off and Why?

[Changingmantra]

I have balances on HSBC Disc (1600.00) HSBC MC (700).. Cap 1 Visa (1300) and A Visa from my CU (2100).

In a few weeks I will have an extra $4000.00 and am planning to use most, if not all of it to pay off some cards.

Here is my thought... I should pay off the cards that will actually grow with me and might reward me for having lower utilization, in this case, Capital 1 and the CU card although the CU card is secured.  Well sort of.. go figure.. I paid it off with the deposit last summer and told them to close the account.  They paid it off.. but did not close the account. I think this was an oversight.   Anyway... I figure paying them off will be good because... they are more likely to give me an "unsecured" Visa with a higher credit line in the future.. or maybe just add on to the one I have, which is what I prefer....  and I will be able to refinance my car with them at a much lower rate which is at 13% interest right now through Chase.

Then again... I can pay Cap1, and both HSBC cards.. and save on the outrageous interest fees from HSBC.  In any event, my utilization will go down tremendously by the same amount no matter what I do.  I would love to get  from under HSBC, but just wondering if I should make them a priority when I know they will not offer me anything in return.  Currently, I pay 100-200 on each card a month.

Your opinions would be greatly appreciated.

[tonsers]

Could you list your limits and APRs for each card?

Message Edited by tonsers on 11-09-2008 11:28 PM

[Anonymous]

since you only owe about 5600, even if you are maxed out you can bring your util below 30% which would have major  increase on your scores.

Alternativly i would pay cu since its a closed account and your hsbc cards since you say the intrest rate is highest which would allow you to pay off capital one in a few months only

[Changingmantra]

Ok this is a general guess here

Both HSBC Cards are @14.9 %  Cash advance = 22% Most of my balance with both of them are cash advances.  CL: MC =700/1100 Disc = 1600/2200   I think the Cap1 is 19% CL = 1300/1500.  The CU Visa = 2100/2500  the interest rate is pretty negligable.  I doubt it is even 5%.

I guess I am wondering if banks will consider not just my score and utilization, but how I am treating THEIR card.  HSBC (Direct Mecharnts) has made it clear that they were not giving a CLI anytime soon and certianly not at my request.  I have already gotten 2 CL increases from Cap1, but that was when my utilization was low.  I know my CU will give me some love when I reach about 650 Fico which I can do in a few months with such decreased utilization.  Just wondering if my rationale is on point or if I should just get from under HSBC quickly.

[Changingmantra]

---

@Anonymous wrote:

since you only owe about 5600, even if you are maxed out you can bring your util below 30% which would have major  increase on your scores.

Alternativly i would pay cu since its a closed account and your hsbc cards since you say the intrest rate is highest which would allow you to pay off capital one in a few months only

---

Actually, the CU is not closed.  This is the odd thing.  I released the secured funds last summer to pay off the card.  I was told the card would be closed, but it never was.  I am still able to use it.  I think it was an oversight of theirs.. or who knows.. maybe they just decidd to unsecure it and let me keep the account.  It does still report as secured... and I am not bringing it to their attention with such a high balance.. (just incase it is a mistake)  I do not want them to NOW close it .. with a balance showing.

[Anonymous]

Going on purely the info you have given I would do this:

Since you are trying to secure a refinance on an auto and Want to use the Credit Union I would pay the $2100, then move over to HSBC and pay the $1600 and put $200 towards the other HSBC and $100 towrds Cap One (For the sake of paying all bills in the month).

You said normally you pay between $100-$200 per card per month.  So on the low side ($100 x 4 cards is $400) You could have the 2nd HSBC paid off in two months.  Month 1 $300 to HSBC and $100 to Cap One, Month 2: $200 plus interest on HSBC the rest to Cap One.  Then repeat with Cap One.  (Of course that is the low end figure)

This all is factored out by your desire to get your auto loan w/ the Credit Union.  For me I would wipe out high interest debt first.  But if you can snag a good interest rate on the vehicle that would obviously free up cash as well.  

[Anonymous]

i would pay them off in the order of which one has the higher interest rate or in your case with a lump sum to pay off you might want to pay off in the order of which one is using more of your income to make the payments then for the remaining cards use the highest interest rate order to pay off with future income with paying extra

as far as the rewards i have yet to see one that the value of the reward exceeds the feescharged by the card although there might be one out there but i have never seen one so i would not let the rewards fool you as you already earned whatever reward by putting the transaction on so carrying a balance is a reward for them and not you

[jmbfl]

---

@Changingmantra wrote:

I have balances on HSBC Disc (1600.00) HSBC MC (700).. Cap 1 Visa (1300) and A Visa from my CU (2100).

In a few weeks I will have an extra $4000.00 and am planning to use most, if not all of it to pay off some cards.

Here is my thought... I should pay off the cards that will actually grow with me and might reward me for having lower utilization, in this case, Capital 1 and the CU card although the CU card is secured.  Well sort of.. go figure.. I paid it off with the deposit last summer and told them to close the account.  They paid it off.. but did not close the account. I think this was an oversight.   Anyway... I figure paying them off will be good because... they are more likely to give me an "unsecured" Visa with a higher credit line in the future.. or maybe just add on to the one I have, which is what I prefer....  and I will be able to refinance my car with them at a much lower rate which is at 13% interest right now through Chase.

Then again... I can pay Cap1, and both HSBC cards.. and save on the outrageous interest fees from HSBC.  In any event, my utilization will go down tremendously by the same amount no matter what I do.  I would love to get  from under HSBC, but just wondering if I should make them a priority when I know they will not offer me anything in return.  Currently, I pay 100-200 on each card a month.

Your opinions would be greatly appreciated.

---

I would pay off everything else but the HSBC card. If that brings you up $100 short, leave it on the CU card. The reason for this is that the FICO score UTIL calculation takes into account the percentage of your accounts that have balances. You will help your FICO score improve by moving as many of your accounts to PIF status as possible and keeping them there. It works! After that you can work on lowering that HSBC balance.