Best Way To Pay Down Credit Cards?

[Anonymous]

Hi, 

My cards are over their limit. So utilization is very high. 

NFCU cashrewards - $10k limit, current $12k 

NFCU platinum - $15k limit, current $17k

I don't have any collections and just paid off my car loan. Unfortunately during the pandemic my 100% on time payments dropped down to 96% from car loan. 

Things have started to calm down. I have about $5k in savings and $700/month (total of minimum credit card payment) left over after all bills are paid. 

What is the best strategy to go about paying off my debt? Should I do double payments?

NFCU cashrewards - $10k limit, current $12k 

NFCU platinum - $15k limit, current $17k

[gdale6]

If they are not asking for the immediate repayment of 4K over the limit then its minimum to the lowest interest rate and as much as possible to the highest interest rate card.

[DebtStinks]

If your whole goal is score-related, the plan might be different than if it's not 100% related to scores.

First, you'll see a decent increase once your cards are NOT over their assigned credit lines. Then your next big boosts in scores should be aggregate util. of 88.9, 68.9, 48.9, 28.9, 8.9. etc. Individual utilization matters as well, but you may be a while away from that depending on how much you can pay toward each every month.

My personal advice would be paying the minimum on the lowest APR card and apply all your extra payment toward the card with the highest APR...this is, of course, AFTER all cards are below their assigned credit line by paying (at least) the amount Over-Credit-Limit plus assumed interest that will post on the next statement.

You could also try for a cash-out auto refi to help reduce interest paid. If going this route and you're tempted to use the cards again, it may not be the best option...so if you go this route, it might be best to clip the cards until you have more discipline going forward.

Regardless of your decision, best of luck going forward!