Tips/Suggestions - HELP

[Anonymous]

Hello FicoFamily,

This is my first post but i have been lurking in the shadows for quite some time. The wisdom and expertise of the people on this forum is amazing and has helped me out tremendously over the years, and for that i thank you. I was hoping i can get some guidance myself.

I recently received a bonus for ~$2,000 and was looking to put about 1,000-1,500 of it towards credit card debt. (With the help of this forum) i was able to clean up my report and get my credit score close to 700 but recently the score has dropped to around 670 because of heavy usage. I was looking for opinions on making the most efficient use of this payment. What should i pay & how much in order to see the best results credit score wise? If it means anything, i have been glued to listening to Dave Ramsey's teachings and i know that he talks about paying debt via snowball method. My only problem with that is that he doesnt believe in a fico score so while his method is more practical, i want to know from the credit score experts what my best course of action to take with 1-1.5k and (hopefully) see a score increase.

Below is my debt information. Any information/suggestions are greatly appreciated. Thank you

American Express - $1400/2000 / UT 70% 

Chase/Amazon - $383/500 / UT 77%

Comenity/Express - $140/500 / UT 28%

Capital One QS - $2900/3000 / UT 100% 

Discover- $3705/8700 / UT 43%

Credit One - $550/600 / UT 92%

[pipeguy]

American Express - $1400/2000 / UT 70% >> Pay $410 to take utility to less than 50%

Chase/Amazon - $383/500 / UT 77% >> Pay $135 to take utility to less than 50%

Comenity/Express - $140/500 / UT 28% Pay $140 due to high APR and small balance

Capital One QS - $2900/3000 / UT 100% Pay whatever you can on this, APR is high and a maxed out card is hurtful to scores.

Discover- $3705/8700 / UT 43%

Credit One - $550/600 / UT 92% >> Pay $550 and CLOSE this card due to high APR, AF, and you don't need it

As an alternative, you can play with the figures to get everything under 70% utility but in any case, I would kill the Credit One card as it has zero purpose or value in your portfolio. The Cap-1 utility is a pretty big factor (utility and apr), so another option is to pay the $1073 and zero out the Amazon/Express and Credit One (and close that one), then use the additional $427 on the AmEx with the thought and goal of using your additional freed-up cash flow to attack the Capital One balance balance every month.

Using your posted figures you have $15,300 in available credit limits, with $9078 in "use" for an overall utility of just under 60%. That does not look good to creditors, meaning credit limit increases and new approvals will be stunted for "high use of existing credit". By paying off $1500 you'll get your overall utility down to about 50% which is better but won't thrill lenders that much. By zeroing out 3 of your cards, then attacking those with the highest utility you'll show a much better overall credit management and lenders like that. 

Others may look at your options differently, but this is what I would do given the numbers you offered. 

[Anonymous]

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@pipeguy wrote:

American Express - $1400/2000 / UT 70% >> Pay $410 to take utility to less than 50%

Chase/Amazon - $383/500 / UT 77% >> Pay $135 to take utility to less than 50%

Comenity/Express - $140/500 / UT 28% Pay $140 due to high APR and small balance

Capital One QS - $2900/3000 / UT 100% Pay whatever you can on this, APR is high and a maxed out card is hurtful to scores.

Discover- $3705/8700 / UT 43%

Credit One - $550/600 / UT 92% >> Pay $550 and CLOSE this card due to high APR, AF, and you don't need it

As an alternative, you can play with the figures to get everything under 70% utility but in any case, I would kill the Credit One card as it has zero purpose or value in your portfolio. The Cap-1 utility is a pretty big factor (utility and apr), so another option is to pay the $1073 and zero out the Amazon/Express and Credit One (and close that one), then use the additional $427 on the AmEx with the thought and goal of using your additional freed-up cash flow to attack the Capital One balance balance every month.

Using your posted figures you have $15,300 in available credit limits, with $9078 in "use" for an overall utility of just under 60%. That does not look good to creditors, meaning credit limit increases and new approvals will be stunted for "high use of existing credit". By paying off $1500 you'll get your overall utility down to about 50% which is better but won't thrill lenders that much. By zeroing out 3 of your cards, then attacking those with the highest utility you'll show a much better overall credit management and lenders like that. 

Others may look at your options differently, but this is what I would do given the numbers you offered. 

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Thank you for the input, i appreciate it. I was thinking the same thing, allocate the payment across multiple cards to get individual UT lower. 

In your opinion, what would it look like if i BT the remaining balances after 1500 pmt. to Discover and attack that one viciously? I would have an inital high UT but then all other cards will have 0 balance. Thoughts?

[pipeguy]

In your opinion, what would it look like if i BT the remaining balances after 1500 pmt. to Discover and attack that one viciously? I would have an inital high UT but then all other cards will have 0 balance. Thoughts?

That would be a good option in my opinion ONLY if you make sure you don't run the other cards back up. Discover does offer lower APR balance transfers and/or 0% 12 months BT's with an upfront 3% fee - if you could/would pay your outstanding balance way down or off within that period, it would be a viable option. Again, if you run the other cards back up after the BT, it's self-defeating.  

[Anonymous]

Absolutely. Thanks for the information. I definitely will go with that plan and my cards will be left in sock drawer until further notice and watch score increase.