How many cards do you have?

[princessminor]

I just recently started taking stock of my life and I believe we have too many credit cards. First off, I have high util about 90% on all, but we've never been late or missed a payemnt.  Most of our income goes to paying off these cards and I'm just tried of all of this.  I want to close some when I pay them off, but nervoius that scores will go down.  I have 23 cards and my husband has 10.  What should we do after we pay some off and some down. My oldest is '97 and youngest is '12.  Thanks in advance.

[HiLine]

Absolutely make the minimum payments. Then devote any money left over to paying off the lowest balances first so you get a boost of confidence to help pay off the next ones. How large are your balances and what are their ARP's?

[princessminor]

Absolutely make the minimum payments. Then devote any money left over to paying off the lowest balances first so you get a boost of confidence to help pay off the next ones. How large are your balances and what are their ARP's?

Thanks for the reply.  Forgive me I don't reply correctly, you are my first.  A few days ago, I did the debt calculator and my highest APR is 26.99% (JPP, T.J Maxx, and Toys R us)  Lowest is 12.99% for Merrick and then everything else in between.  I've decided to not let anyone of the cards pass the 3 yr plan and when I pay off one, that money will be put to paying off another one.  I was wondering if I should pay min on some and that extra I would have paid should I then put it towards a lower balance to knock them out first?  Just seems overwhelming.

[HiLine]

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@princessminor wrote:

Thanks for the reply.  Forgive me I don't reply correctly, you are my first.  A few days ago, I did the debt calculator and my highest APR is 26.99% (JPP, T.J Maxx, and Toys R us)  Lowest is 12.99% for Merrick and then everything else in between.  I've decided to not let anyone of the cards pass the 3 yr plan and when I pay off one, that money will be put to paying off another one.  I was wondering if I should pay min on some and that extra I would have paid should I then put it towards a lower balance to knock them out first?  Just seems overwhelming.

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Oh no. You absolutely have to make the minimum payments on all of them unless you want your credit profile to suffer heavy damage.

AFTER making all the minimum payments each month, then put that extra toward the smallest balance.

It's not overwhelming. Just make sure you set up automatic payments so that each month the minimum payment is automatically withdrawn from your bank account. Do you know how to do this?

[princessminor]

No, sorry worded it incorrectly.  I would definitely make min payment, but I was thinking instead of making the payment for 3 yr payoff, should I say make 1/2 3 yr plan and that extra money not being used send to the other half and make those say 1-2 yr plan.  

[princessminor]

Unfortunalety I can't set up payments becasue my husband's income flucutates every 2 weeks so I have a budget book and I do the budget at the beginning of the month and then tweek it according.  I'm good about paying on time and not missing a beat, it's just that now I want to stop paying the min and have a game plan to get out of debt sooner rather than later.

[HiLine]

Well if you can be self-motivated and rigorous about budget planning, then actually the most sound course of action would be to pay off the balances with the highest ARP's first. The automatic payments are for minimum payments only. You have complete control over the extra payment. I recommended the automatic minimum payments to give you some peace of mind. Never, ever miss a minimum payment!

So the plan goes like this.

Suppose you have 3 cards.

Card 1: 5k balance, 12% APR, minimum payment $100

Card 2: 10k balance, 5% APR, minimum payment $150

Card 3: 8k balance,  20% APR, minimum payment $100

What you are going to do is this:

Set up automatic payments to all 3 cards. So that's $350 a month. Let's say you have 1k extra money for the first month. Then you pay that 1k toward Card 3's balance because it has the highest APR.

Month 2, the automatic minimum payments continue. And let's say you only have $500 extra this month. Then pay you that $500 toward Card 3's balance because it has the highest APR.

Repeat this until Card 3 is completely paid off. Then replace everything about Card 3 with Card 1 since Card 1 will now have the highest APR.

[princessminor]

Ok, I got you!!  Thanks so much for all your help!!  I'm hoping to get this all down and never let it get out of hand again!!!  Does it hurt to have so many cards?  It just seems like too many for one person.  What is normally the concensus?  

[Imperfectfuture]

That is an individual choice. In your case, I would definitely close down the one's you won't be using.

While you are repaying (since this is a 2 to 3 year plan), freeze the cards (actual ice in the freezer). As you pay down the balances, you want your scores to go up, so don't cancel any cards yet. If a card is payed off (keep a budget list just for cards), use that card every 6 months to pay a bill online.

When you are down to about 30% utilization, start closing the cards you don't want with the smallest limits.  When you are down to 10% utilization! close any cards you don't want.

I personally want a total of 5 cards, then maybe a travel card later. Some people on this forum manage that many cards just fine. Personally, I prefer just a small stash of quality, and cards that I will actually use, so my Legacy is scheduled for chopping in March, I plan on two other cards next year, if capital one doesn't get rid of the annual fee, will close, etc.

I keep what I like and is useful, get rid of rest,

[HiLine]

You have a very long credit history. Your number of credit cards is fine. What concerns me and your future lenders is the number of cards that carry balances and the utilization on each of them. Just consistently and persistently pay those balances off and your credit will be perfect.