Strategy for paying off cards

[Anonymous]

Yes, I intend to call the highest and see about lowering the rates. That definitely would help on a couple.

I also intend - once I get util down - to see about lower rate transfers. I just have too many lines with too much util right now for that... Just got turned down by CCCU for that reason.

No idea what my scores are right now, but last I checked, I was in the 630 range. Imagine I'm not too far off that now, since I'm still not maxed out or ever late, etc. But who knows; the scoring thing seems quite arbitrary at times...

Thanks for all the ideas - I appreciate it. Anyone else?

[George2037]

This is the stratigy I came up with for myself, on my larger TL's I pay min payment or intrest whichever is the greatest, that way the balance either stays stagnent or go down.  I take all extra money and place it on the smaller TL's and once they are paid off I take the money and apply it to the larger TL's.  My goal now is to establish a history of payments over time, not too worried about UTL%.  I know once they are all paid off in 8 months or so I'll have 4 years of history, 5% UTL and 2 Paid in Full TL's with no missed payment's. 

But again my goal now is History, I'll worry about UTL in the spring.

[Anonymous]

Check out Dave Ramsey's book.  The debt snowball strategy sounds perfect for your situation, and he has a good budget strategy that will help also.  Google him and you'll get his website and plenty of additional information.

[Anonymous]

Want to know a secret...???

If you have multiple credit cards issued by the same bank, like Bank of American, Chase Bank...consolidate the credit lines into one and only borrow the money or owe the money from that credit card alone, instead of owe the money on several credit cards.

And the bank(credit card company) only report to credit bureau once per month after the statement closing date, by doing this, I made balance transfer (7 days after statement closing date which the bank might already report the account status to 3 credit bureau) to pay off some credit cards then consolidate 3-4 credit lines together to $57,500.00 and leave the credit cards I don't use the credit lines to be just $1,000.00 and let only one card carry high balance...because credit score system only look how many cards that you owe high balance, it doesn't care how much money you owe, so in this case I can owe more money to the bank but still get high credit score from 3 credit bureau (Exp. Eqx. TU)...believe it or not, I made balance transfer from 2 banks total of $121,400.00 and my credit score still go up from 757 to 777.   

What a shame!!!            

[Anonymous]

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George2037 wrote:

This is the stratigy I came up with for myself, on my larger TL's I pay min payment or intrest whichever is the greatest, that way the balance either stays stagnent or go down.  I take all extra money and place it on the smaller TL's and once they are paid off I take the money and apply it to the larger TL's.  My goal now is to establish a history of payments over time, not too worried about UTL%.  I know once they are all paid off in 8 months or so I'll have 4 years of history, 5% UTL and 2 Paid in Full TL's with no missed payment's. 

But again my goal now is History, I'll worry about UTL in the spring.

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Though still not paying both int + min, I like this - at least it gives me an option to pay some interest. I know I'm not going to be able to do both, so this is a good compromise. Don't know why I didn't think of that myself.

Thanks.

[Anonymous]

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SirBabyWawah wrote:

Want to know a secret...???

If you have multiple credit cards issued by the same bank, like Bank of American, Chase Bank...consolidate the credit lines into one and only borrow the money or owe the money from that credit card alone, instead of owe the money on several credit cards.

And the bank(credit card company) only report to credit bureau once per month after the statement closing date, by doing this, I made balance transfer (7 days after statement closing date which the bank might already report the account status to 3 credit bureau) to pay off some credit cards then consolidate 3-4 credit lines together to $57,500.00 and leave the credit cards I don't use the credit lines to be just $1,000.00 and let only one card carry high balance...because credit score system only look how many cards that you owe high balance, it doesn't care how much money you owe, so in this case I can owe more money to the bank but still get high credit score from 3 credit bureau (Exp. Eqx. TU)...believe it or not, I made balance transfer from 2 banks total of $121,400.00 and my credit score still go up from 757 to 777.   

What a shame!!!            

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SirBaby - Yes, could try to consolidate a few lines but most are separate companies.

As for the second paragraph... I'm sure there's good info in there, but I'm having trouble following what you're saying. You lost me about three lines in...

[George2037]

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George2037 wrote:

This is the stratigy I came up with for myself, on my larger TL's I pay min payment or intrest whichever is the greatest, that way the balance either stays stagnent or go down.  I take all extra money and place it on the smaller TL's and once they are paid off I take the money and apply it to the larger TL's.  My goal now is to establish a history of payments over time, not too worried about UTL%.  I know once they are all paid off in 8 months or so I'll have 4 years of history, 5% UTL and 2 Paid in Full TL's with no missed payment's. 

But again my goal now is History, I'll worry about UTL in the spring.

---

Though still not paying both int + min, I like this - at least it gives me an option to pay some interest. I know I'm not going to be able to do both, so this is a good compromise. Don't know why I didn't think of that myself.

Thanks.

I came up with my stratigy when I was applying for new credit and was being rejected for "Limited History".  Yes just paying intrest is a waste of money, and carring a balance kills your UTL (30% of your FICO? I once read).  But Length of time is third on the list right behind UTL, Payment History for effects to your FICO.  I figure if my history shows that I once had a high balance of $XXXX.XX and after 1 year have a balance of $X.XX, I gain all three positive factors.   Hense the "Not in a hurry to pay off" additude I have for my balances, wasting money on intrest? Probably.  Worth it?  Most definatly, what price tag can you put on rasing your FICO through legit account usage.  I spend $500 in intrest on High CL's while lowering my UTL on lower CL's, my score goes up 50 points I save 1-2% on a mortgage, bam I get my $500 back plus about $40k in intrest over the course of the loan.

Forgot to mention, once the lower CL's are paid off I go after CL increase.  I figure if my History with the company is good, my FICO will have less of a impact on ther aproval.  I got a Citi Financial Personal Loan 2 years ago, after one year got a Citi Card with $2500 CL, and now approved for a Home Depot ~Citi Store Card (I think it's $4600 CL, but wont be sure until I get my paperwork).   Everything that goes up, is free money towards UTL.  Heck my Circuit City Card CL doubled after one year, same with my Macy's and they didn't pull anything from my CR....the increases came from History with the company.

Message Edited by George2037 on 08-29-2007 10:27 AM

[Anonymous]

My problem isn't history related. I have a long history of very good credit, but almost 4 years ago, filed BK7 for a variety of reasons. Even so, my EX score is 659 (per CCCU, who just turned me down for too many TL and too high util... ), so I'm doing okay. I just gotta get out from under paying (juggling?) 10 cards a month.

Thanks for your input - always interesting to hear others' situations and thought processes. I think there are many ways to approach it; one should do what works for them at the time, not necessarily the least expensive, or that which others would do...

[Anonymous]

Given your situation, instead of paying on low balance card first,pay off the highest interest rate card first-everything towards that the rest get minimum payments. The way to get cards paid off is to make more $ go towards principal paydown and the best way to do that is to eliminate the highest interest card balances first. This might not be true if you had a bunch of cards with minimum payments and your high interest cards had very high balances. But it is true here so the decision is a no-brainer in my opinion.

[Anonymous]

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rhinocl wrote:
Given your situation, instead of paying on low balance card first,pay off the highest interest rate card first-everything towards that the rest get minimum payments. The way to get cards paid off is to make more $ go towards principal paydown and the best way to do that is to eliminate the highest interest card balances first. This might not be true if you had a bunch of cards with minimum payments and your high interest cards had very high balances. But it is true here so the decision is a no-brainer in my opinion.

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I see your point. That 28% card is killing me psychologically and financially - and it's not that high a balance. I will be calling them and a few others within a few weeks to see if I can get rates down. If I have some success, I may re-evaluate my approach. However, I think I need to get a couple of the smaller ones gone first just to eliminate some payments... Both approaches have merit.