Which credit card to pay off first?

Anonymous · ‎01-30-2012

I have 8 credit cards with interest rates as high as 19.99%. My question is if I pay the minimum on the 7 other cards I have will the banks on those cards reduce my limit because I am only making Minimum payments only? I wanted to take the money from the other payments and add that to the higest interest card first.

RobertEG · ‎01-30-2012

You appear to have a good understanding of the issues.

From a purely financial point of view, paying the higher interest cards first makes sense.

From a purely FICO point of view, scoring does not care about interest rates, so reducing the higher % util cards first makes sense, as all I have seen indicates that their scoring under individ card util hurts more at the higher percentage levels than it helps by reducing util at the lower percentage levels.

As for reducing CLs, I have seen several posts stating that their CL was reduced based on only making min payments. So, yes, I think that is also a valid concern.

Personally, I would rather have the $$ in my pocket than a few extra FICO points, but it varies with the needs of each consumer.

Anonymous · ‎01-31-2012

@Anonymous wrote:
I have 8 credit cards with interest rates as high as 19.99%. My question is if I pay the minimum on the 7 other cards I have will the banks on those cards reduce my limit because I am only making Minimum payments only? I wanted to take the money from the other payments and add that to the higest interest card first.

If you can put down the break down of each 8 cards with CL, amount owed and APR, a better repayment strategy can be suggested that might help in boosting the score.

Recently there was a post of somone who had extra 20000 and was willing to pay the CCs, read that post and you would know what I mean.