Now what?

[Anonymous]

Hi everyone, I'm a new member - I have learned a lot reading the forums.  But, I have a question-

I'm 22, I just paid off my major credit cards...

Bank of America Student Card - $1700.00 CL

Bank of America Rewards - $4000.00 CL

Chase Rewards - $3100.00 CL

Target Store Card - $500.00 CL

Target Visa - $1000.00

Credit Union Visa - $2000.00

I also have-

Best Buy Store Card - CL $2500.00.  Current Balance: $1896.85

Home Depot Store Card -  CL $2000.00.  Current Balance: $228.28

[Both of the above have no interest promotions]

I also have a $450.00 car payment, a $632.00 mortgage, and I pay around $110.00 in consolidated student loans.

I haven't began saving for retirement but I will be saving 10% of my income into a matching 401(K) with my job.  I was paying around $1,100 in credit card payments for the past few months because I wanted to pay everything off.  Now, that I'm done paying the cards off, I would like to know: what should I do with the money that going towards paying credit card debt?  Should I pay my interest-free credit lines?  Should I pay principal towards my mortgage?  Should I pay more towards my car?  Should I save more?    What are the pros/cons?  My major goal is to increase my credit score.

I'm not for sure if this belongs in the 'credit card' section.  Thanks in advance for your help.

[MrChairman]

Usually the quickest way to raise  your credit score is to lower your credit utl. I would pay off the CC, even though they're 0 interest simply because even though your not paying interest, the balance is still hurting your overall credit util.

-The Chairman

[JoeBJay20]

The first thing you need to do is to open a savings account and build it up to a minimum of 6 months worth of salary.  Once you take care of that, then you can start paying down debt further.

[Anonymous]

+1   Absolutely start building an emergency fund.

[RobertEG]

I agree with others that the priority is to first put some money in savings.  Since you already have a credit union account, you can do this right away without opening any new accounts.

After that, I would probably  first address the Best Buy card.  It is showing a % util of 80%, and is the biggest negative in your CR now.  And its seductive zero introductory rate wont last forever.  It could turn bad in a hurry.

Unless your installment loans (auto, mortgage) are at higher rates than your unpaid revolving debt, I would not make paying them down a priority.  And the impact on paying down installment loans is minor in FICO scoring.

No one can set a payment plan for you other than yourself, for it depends on whether you interest is in financial stability or FICO score increases.  They are often at odds with one another.