Snowball or target utilization??

[Anonymous]

Hi all. We have a lump sum that we would like to put towards our unsecure debt. We have no derogatory history and all accounts are in good standing. Our scores suffer from high utilization percentages. The lump sum is not enough to pay off all 26 accounts...only 21 of them. Here is my question. Should I pay off the 21 accounts leaving 5 high balance, high utilization accounts then use the bulk monthly savings from the 21 to snowball??  My other thought was to pay everything to 30% then snowball from there. That would help with the utilization portion of our scores but still leave us with 26 accounts to snowball. Any thoughts from the community on which way to attack this monster?

[Jnbmom]

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@Anonymous wrote:

Hi all. We have a lump sum that we would like to put towards our unsecure debt. We have no derogatory history and all accounts are in good standing. Our scores suffer from high utilization percentages. The lump sum is not enough to pay off all 26 accounts...only 21 of them. Here is my question. Should I pay off the 21 accounts leaving 5 high balance, high utilization accounts then use the bulk monthly savings from the 21 to snowball??  My other thought was to pay everything to 30% then snowball from there. That would help with the utilization portion of our scores but still leave us with 26 accounts to snowball. Any thoughts from the community on which way to attack this monster?

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What are the balances and interest rates on the cards?  While credit scores are important I think at times we al tend to focus more on that then actually looking at how we can save money .If you can pay off the higher interest cards and save money that might be your best bet, but knowing what balances are rates you have can give us a better picture.

[Anonymous]

All the accounts are credit card accounts. Balances range from $180 on the low end to $6500 on the high end. All are at industry standard rates except for the Discover which is at 0% until November. My first thought was to kill as many accounts as possible and then snowball the rest. By the way, this approach effectively pays off all debt that is in my wife’s name. She would be free and clear if I pay the 21 accounts. The 5 left are in my name.

[Remedios]

Hi and welcome to the forums @Anonymous 

You would need to list cards individually with limits, balances and APRs if you want suggestions on how to distribute the funds available. 

Just a snapshot wont work

Thank you 

[SouthJamaica]

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@Anonymous wrote:

Hi all. We have a lump sum that we would like to put towards our unsecure debt. We have no derogatory history and all accounts are in good standing. Our scores suffer from high utilization percentages. The lump sum is not enough to pay off all 26 accounts...only 21 of them. Here is my question. Should I pay off the 21 accounts leaving 5 high balance, high utilization accounts then use the bulk monthly savings from the 21 to snowball??  My other thought was to pay everything to 30% then snowball from there. That would help with the utilization portion of our scores but still leave us with 26 accounts to snowball. Any thoughts from the community on which way to attack this monster?

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Pay all accounts to 28%, then snowball from there.

[ChessChik47]

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@Anonymous wrote:
All the accounts are credit card accounts. Balances range from $180 on the low end to $6500 on the high end. All are at industry standard rates except for the Discover which is at 0% until November. My first thought was to kill as many accounts as possible and then snowball the rest. By the way, this approach effectively pays off all debt that is in my wife’s name. She would be free and clear if I pay the 21 accounts. The 5 left are in my name.

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If that option is what you're leaning toward, then go for it.  If her debt is eliminated and she has good enough credit limits then maybe you can balance transfer some of your leftover debt (some of the 5 accounts) to her and maybe do it via a 0% balance transfer offer if she has a card that can accomplish that.  Good luck to you with whatever you decide.