What to Pay Credit Cards

[Anonymous]

Here's my question. I have three cards, all over 90% utilization. About 52k total across the three. I have 38k to pay off just credit card debt. 

card 1 owes 25k

card 2 owes 13.5k

card 3 owes 13.5k

my initial plan was to pay off cards 2 and 3, then apply the remaining 11k to card one. But then I would still be 50%+ utilization on that card.  

would I be better off splitting across all three cards to get utilization under 20% on all instead?  Wondering if that would have a larger impact on credit score. Currently everything in credit file is perfect except for the huge utilization obviously.  Card one also has the lowest APR but not a huge difference. For the sake of argument assume all three are maxed.  

thx!

[AllZero]

@Anonymous  Hmm...perhaps, from a scoring and financial standpoint, pay to zero card 2 and 3 and the remainder to card 1. Next cycle you can get card 1 under 48.9%, then 28.9%, etc.

Not knowing your exact details, below are benchmarks for FICO 8.

Remember these aggregate utilization thresholds: 8.9%, 28.9%, 48.9%, 68.9%, 88.9%
Remember these individual utilization thresholds: 28.9%, 48.9%, 68.9%, 88.9%

[Adkins]

This depends on what your goals are. Do you need a quicker FICO score boost? Or are you looking to save money on interest while you pay down the cards?

[tacpoly]

I would pay off cards 2 & 3 and the remaining on card 1, then work on paying off card 1 as quickly as possible. Practically speaking, having cards that give a grace period for new charges is useful to have.  Is there a reason why you want to optimize your scores?  

[AllZero]

I would recommend reading the below from ABCD2199
The Truth about Credit Card Utilization
My 11 Rules to Credit Rebuilding
FICO Score: What to pay down first?

From Birdman7
General Scoring Primer and Version 8 Master Thread rev.5.17.20

[Anonymous]

Pay down the two smallest first, put the 11k on the big one, an then just apply your might and will to paying down the large one over time.  Let those two "zeros" be motivation to keep them zero and to keep working on the larger one.

The only thing to be careful of is CLDs... if you've been carrying those balances for a one time, one or more of the issuers could take this as an opportunity to balance-chase you and give you a CLD. Just be on the lookout and if it happens, call them and ask them to reverse it.  They might... might not.  

Good luck paying everything down.  Congrats on being able to pay it down.  Keep up the good work.

[Anonymous]

Only reason about better score is possibly an auto loan in the next year. Maybe, not for sure yet. Primarily just stuck in the too high of a balance loop to even get attractive BTO offers. My goal is after these payoffs to have some decent BTO offers from the Fico boost so I can move the remaining balance to a much lower interest rate and start slamming it hard as I can. 

Big one is BofA which is 11.99

chase and citi are the other two, and before the high balances I would get really nice BTO offers but none now. Those are a couple points higher apr wise.  I think my fico is in the 660s and literally the only dinger is the credit card utilization's. Just trying to get financial health in better shape primary factor.  

[coldfusion]

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@Anonymous wrote:

Only reason about better score is possibly an auto loan in the next year. Maybe, not for sure yet. Primarily just stuck in the too high of a balance loop to even get attractive BTO offers. My goal is after these payoffs to have some decent BTO offers from the Fico boost so I can move the remaining balance to a much lower interest rate and start slamming it hard as I can. 

Big one is BofA which is 11.99

chase and citi are the other two, and before the high balances I would get really nice BTO offers but none now. Those are a couple points higher apr wise.  I think my fico is in the 660s and literally the only dinger is the credit card utilization's. Just trying to get financial health in better shape primary factor.  

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Most of the relevant points have already been touched on but in general you've been given good guidance.

If you're balance-chased on the Citi and Chase cards you can call them and ask if they will restore the CL. You have nothing to lose from trying other than the time spent making the calls.

Will you be able to attack the remaining balance on the BoA card relatively aggressively?  You should at least be able to shift over what you were paying against the other 2 cards to the BoA card in addition to what youv'e been paying.

[Anonymous]

Just an update.  Did the 403b loan and paid off all but the biggest card balance.  After that transferred that with improved score to 0% for a year.  Experian score is now 847 as of today!

I'll post a screenshot if i can figure out how lol!

https://www.dropbox.com/s/r2u3ehmswyua85l/Capture.JPG?dl=0